Banks Look to Cut Back on Credit Card Perks and Rewards

Major banks have been adding restriction lately to their credit cards. But at the same time, they have brought to market several premium cards or enhanced existing products to offer more perks than ever before. Cards like Chase Sapphire Reserve, American Express Gold and Platinum or Hilton Aspire cards, the Marriott Rewards Premiere and others have pushed the boundaries in recent year. With these cards you can score things like free flights and hotel stays, access to lounges, a variety of credits and more perks.

banks cut back on rewards



Banks offer these premium cards in order to start a banking relationship that hopefully results in bank accounts, more annual fees, interest charges and transaction fees. But there’s one issue. People who try to maximize the benefits on their cards and take advantage of every perk possible, such as DD readers for example, are not the ideal customer. As credit card miles and points are moving more to the mainstream, banks are feeling the pain. They are the ones footing the bill for free flights and hotel stays, or you lounge visits and discounts on food.

Wall Street Journal reports that JPMorgan, Citigroup, American Express and other large banks are discussing how to cut back or rejigger some of their cards’ rewards, according to people familiar with the matter. The banks don’t plan to end rewards, but want to shift them in ways that encourage more card usage and scale back upfront bonuses. One such attempt was the Barclays Arrival Premier card, which was very short lived. The cost of rewards programs had grown an average 15 percent on a year-over-year basis as of the third quarter of 2018 at several of the biggest credit card providers, bank analyst Charles Peabody told the Journal. In 2010, banks were spending about $10.6 billion a year on their credit card rewards, but in 2016, that number ballooned to $22.6 billion. Chase leads the way, especially with the launch of the Sapphire Reserve card.



Banks hope that credit card rewards will balance out between those savvy users which are a tiny fraction, and the rest of the casual cardholders. While DDG readers will never carry a balance for example, there’s plenty of people out there who do, either because they;re not sure how much they’re getting charged, or just cant afford to pay in many cases. But that balance has been shifting, since card users have been getting smarter about their finances and the opportunities that credit cards offer, especially those premium products.

What’s In a Credit Card Number, And Will They Ever Run Out?

There’s a lot of credit cards out there and the number keeps constantly growing. You might worry that they will run out of numbers one day. Maybe we’ll need to make them with 20 digits? Let’s look at what’s in a card number first and then see if they will run out any time soon.

Credit Cards

What’s In a Credit Card Number

Credit card numbers guidelines are laid out by the International Organization for Standardization and the American National Standards Institute. Besides the numbers, they also set standards for the size and shape of credit cards. That’s why all cards are the same size and we don’t see any round credit cards.

The first digit signifies the network and industry and it’s known as the Major Industry identifier. Visas start with a “4” for example, while Amex cards start with a “3.” That allows the merchants to identify who is ultimately responsible for payment of charges.

Number Industry Likely Card Network
1 Airlines
2 Airlines & Financial N/A
3 Travel & Entertainment American Express
4 Banking & Financial Visa
5 Banking & Financial Mastercard
6 Merchandising & Banking Discover
7 Petroleum N/A
8 Health Care & Telecommunications N/A
9 Open for Assignment N/A

The first digit, along with the five that follow it, are known as the Bank Identification Number, or BIN. They’re assigned to the individual payment networks (Visa, Mastercard, Amex), which then distribute them to card issuers (Bank of America, Wells Fargo, Citi etc.).

Issuer Example Identification Number Meaning
Chase 414720 Chase Signature Visa
Bank of America 480011 Bank of America Visa Gold
American Express 379741 American Express Credit
Citi 542418 Citibank Platinum Mastercard
Capital One 414709 Capital One Signature Visa
Discover 601101 Discover Rewards
Wells Fargo 446542 Wells Fargo Platinum Visa
US Bank 403766 U.S. Bank Visa
Barclays 559309 Barclays World Mastercard
USAA 549123 USAA Platinum Mastercard

The next nine digits on your card are given out to individual users by the issuers, and are unique to your account.

The last digit on your credit card is known as the “check digit.” It’s calculated via a formula devised by mathematician Hans Peter Luhn. The formula uses the other 15-digits for the card and allows processors to instantly know whether a number is an actual credit card number, or whether it’s been entered incorrectly due to either error or fraud.

Will We Run Out of Credit Card Numbers?

There’s a lot of credit cards out there. Americans have about 3 on average. Then there’s debit cards and virtual credit card numbers that use the same format. Data breaches make issuers replace cards as well. So there’s a whole lot of numbers and they keep growing. So you might wonder if card numbers will ever run out.

The answer is NO. You do not have to worry. “Each person in the world could have more than a million potential credit numbers” said Cris Poor, a mathematics professor at Fordham University. The potential 16-digit credit card combinations provide far more account numbers than could ever be used. 16-digit card numbers have 10 quadrillion possibilities NBC writes.

No, Carrying a Credit Card Balance Does Not Help Your Credit Score

Your credit score is one of the most important financial factors. It is even more important if you’re into credit card churning. You need a good score for credit card companies to approve you for new credit cards. You can find out more here about credit scores, and what to do to improve yours or how to start from scratch. But many people do not check their scores, or follow bad advice or myths that is actually hurting them.

Carrying a Credit Card Balance

One of those myths is that if you carry a balance on your credit card is a good thing. Many consumers don’t pay their entire credit card bill each month because they think carrying a balance will help their credit score. Based on a creditcard.com survey, 22 percent fell prey to a persistent misconception that carrying a balance helps your credit score.

You should always pay your bill in full. The ratio of the amounts you owe to your overall available credit limit is an important factor. It accounts for 30 percent of your credit score.

Not paying your cards in full doesn’t just hurt your credit score and your ability to borrow, but it also costs you money each month. Credit card debt is a very high interest loan, so it should be the first to pay back.

How To Use Your Credit Card Travel Credits Before Year’s End

Premium credit cards often come with large annual fees, but also extra benefits that give you more value. These added benefits often are enough to offset the annual fee or even cover it. Travel credits are some of the most important benefits that premium cards offer and many of them expire at the end of the year. Some credit cards like U.S. Bank Altitude Reserve go by cardmember year, so you’ll have till whenever that date is for you.

Let me know if you spot any errors or if you have any extra information that could help other readers to maximize their credit card’s travel credits this year. Hopefully you didn’t wait till now to maximize your travel credits, but if you did, maybe this article will help.

Credit Card Travel Credits

Amex Platinum Cards

The personal Amex Platinum Card and the Business Platinum Card offer a $200 annual airline fee credit. This credit only apply to the airline that you select at the beginning of the year. If you’ve never done this, then you can register for an airline here. For the Business Platinum card, the airline you choose will also get you 35% of your points back when redeeming for coach tickets. You can choose any of these airlines.

  • Alaska
  • American
  • Delta
  • Frontier
  • Hawaiian
  • JetBlue
  • Southwest
  • Spirit
  • United

If you aren’t sure if you’ve used any of this credit, you can check on your benefits page in your account.

The airline credit can be used for baggage fees, change fees and food and beverage purchases on board, but it also works on gift cards. It also works on some gift card purchases, which makes it easier to use it up, especially this late in the year. Here’s some gift card options that will work:

  • American Airlines Gift Cards up to $100
  • Delta Gift Cards up to $50
  • Hawaiian Airlines Gift Cards up to $100
  • Southwest Gift Cards up to $100
  • United Gift Registry up to $100

Amex Premier Rewards Gold Card

This credit card comes with a $195 annual fee, but also offers $100 per calendar year in statement credits when incidental fees, such as baggage fees and other incidentals. Gift card purchases as the ones mentioned above will also work for the Premier Rewards Gold Card.

Bank Of America Premium Rewards Card

The Bank Of America Premium Rewards Credit Card comes with a  $100 Airline Incidental Statement Credit per calendar year for qualifying purchases such as seat upgrades, baggage fees, in-flight services, and airline lounge fees – automatically applied to your card statement. As per their fine print, Airline ticket purchases, mileage point purchases, mileage point transfer fees, gift cards, duty-free purchases, award tickets and fees incurred with airline alliance partners do not qualify. However, that’s not always enforced completely.

Here’s some gift card options if you have yet to maximize the credit for this year:

  • American Airlines eGift Cards

Chase Sapphire Reserve

One of the best perks that comes with the Chase Sapphire Reserve card is the $300 Annual Travel Credit which helps offset the $450 annual fee. This travel credit is one of the most generous of this kind since it applies to a wide array of travel charges, from airfare, hotels, Uber and even Metrocard charges in NYC and similar services in other cities. Just keep in mind that the for cards issued prior to February 21, 2019 reimbursement was based on Calendar year and for cards issued after February 21, 2019, it will be reimbursed by membership year. Your next year’s $300 Annual Travel Credit will begin after your statement closing date in December of the current year, so hopefully you have used up this year’s credits already.

Besides all the uses, here’s some gift card options that work:

  • American Airlines Gift Cards
  • Delta Gift Cards
  • Marriott Gift Cards
  • Airbnb Gift Cards
  • MileagePlusX Uber Gift Cards

The card has an easy tracker for your travel credits. Just go into your Rewards Home and you should see the tracker on top right of the card’s page.

Citi Prestige Card

The Citi Prestige card has a $250 annual air travel credit that you can use to help offset the cost of airfare, baggage fees, airline lounge access and even some in-flight purchases. If you travel often then this is easy to use up, because you can use it to purchase tickets with any airline, no selection required like with American Express.

This is not one of the travel credits that you want to let go unused till the end of the year and hopefully you have used it up already for 2019. The eligible purchase counts for the year when the statement closes, not date of purchase. Tickets purchased late in the year, might not count against the benefit in the current calendar year. For example, if you purchase now and your statement closes in January, then your purchase will count towards the 2018 annual air travel credit.

Here’s some gift card options that work:

  • American Airlines Gift Cards
  • Delta Gift Cards
  • Southwest Gift Cards
  • United Gift Cards

Chase Ritz-Carlton

This credit card offers $300 in annual travel credit to use for baggage fees, Global Entry fees, seat upgrades, access to your preferred airport lounge and more. However unlike other cards, this credit is not automatically applied. After you use your card for eligible expenses, you need to call 1-855-896-2222 within 4 billing cycles, to get your charges refunded after your flight.

I believe most airline gift card purchases are no longer working to trigger the credit, besides Southwest. But if you’re buying gift cards or using the credit for other expenses that are not exactly covered, do not use all the $300 at once. Since you have to call in to get your credit, customer service reps will question you why incidental charges are so high. Do a couple of smaller purchases instead.

CNB Crystal Visa Infinite Card

The Crystal Visa Infinite Card from City National Bank comes with $250 airline incidental fees statement credits per calendar year. What’s special about this card, if you’re able to get approves, is that the $250 credit is per calendar year per card. You can add up to three authorized users for free per cardmember account and each one of them gets the Incidental Fees Statement Credit. That means you can get up to $1,000 back annually.

If you haven’t maximized the credits for this year, then American Airlines e-gift cards are the only option as far as I know, besides any incidental fees that always work.

UBS Visa Infinite

The UBS Visa Infinite card has a $250 Airline Fee Credit. Qualifying Airline Purchases must be charged to a UBS Visa Infinite credit card, either primary or additional cards. You get $250 total per account. UBS and Visa rely on airlines to submit the correct information for these transactions. To enroll in this benefit you need to call 888-762-1232 or call collect 201-352-5257 when outside the U.S. You can only select one eligible domestic airline for the whole year. Only charges on that airlines will qualify for credit.

Airline ticket purchases, mileage point purchases, mileage points transfer fees, gift cards, duty-free purchases, award tickets and fees incurred with airline alliance partners will not qualify for credit.

US Bank Altitude Reserve

With this credit card, account holders can earn up to $325 every cardmember year in automatic statement credits for travel purchases made directly from airlines, hotels, car rental companies, taxis, limousines, passenger trains and cruise lines. This is pretty generous as well, just keep in mind that the end of the year doesn’t mean anything for this card. $325 travel credits are based on your membership year.

Almost any type of travel purchase will be automatically reimbursed. Avoid gift card purchases with this card, since even small amounts have been reported to cause account shutdowns.

List Of 2%+ Credit Cards

Having a 2%+ credit card is probably a good idea for most people. We have our bonus category cards for lots of spending and then we’re usually working towards a minimum spend requirement. And then there’s times when you just need a 2% card.

I tried to compile a list here with as many credit cards that offer at least 2% back in the form of points, miles or just plain cash. Some of these cards are for specific states or have some requirements in order to get the rate. I’ve listed them anyway, with a short explanation alongside the rate. I’ve also added links if I have covered the card in a post, but the offers listed in those links might not be available any longer.

list 2% cash back credit cards

I hadn’t heard some of these names before and I’m sure there’s some more obscure cards out there. If you know of any, let me know in the comments. I’ll also try to keep the list up to date myself as new cards come up.

I just added the USAA 2.5% card, Amex Blue for Business and the Blispay card to the list, which I hadn’t updated in a while

Alliant Bank

American Express

Bank of America

  • Platinum Privilege Travel Rewards 2.1% Points (requires 100K with Merrill/BOA)

Barclays

  • Priceline 2% Cash (no longer offered)
  • Arrival Plus 2.1% Points (was 2.2, grandfathered for some)

BBVA

  • Compass NBA Card 5% Points (All Star Weekend and Finals only, up to $5k)

Blispay

  • Blispay Visa Card – 2% cash automatic plus 6 month no interest on $199+ purchases

Capital One

  • Venture 2% Points
  • Spark 2% Business Cash
  • Spark 2% Business Miles

Citibank

  • Double Cash

Discover

  • Escape 2% Points (no longer offered)
  • Miles 3% Points (one year)
  • It 2% Cash (one year)

FNBO

  • Bucksback Visa 2% Cash (CO,IA,IL,KS,NE,SD,TX but all can apply, just use one of those states in the address along with the rest of your actual address)

FNBO Direct

  • Platinum 2% Cash (1 Year)

JCB Murakai

  • 3% Cash (CA, NV, OR, WA, or HI)

Kinecta Credit Union

  • Platinum First 2% Points ($1000 max credit limit)

Orbitz

  • 2% Points

Nasa Credit Union

  • Platinum 2% Cash (after $2000, bonus paid at end of the year)

Navy Federal Credit Union

  • Flagship Rewards Visa 2% Points

Hawaii State Federal Credit Union

  • Signature 2% Cash (Hawaii only, 60 days)

Nusenda Credit Union

  • Platinum Cash Rewards 2% (Socorro, Taos, or Valencia County. 90 Days)

PayPal

PCMCU

  • Platinum Rewards 5% Cash (Green Bay area, max $50 a month)

PenFed

PSECU

US Bank

  • Fidelity Rewards Visa Signature Card (when redeemed to Fidelity Account)

USAA

Zions Bank

  • AmaZing Cash 2% (90 Days)