Rule Changes Not the End of Your Miles

With the action by President Obama to sign into law the Credit Card Accountability Responsibility and Disclosure Act of 2009 (sorry, even I could not find an easy acronym for this one) some of the first provisions will begin in August, which means that some of the rumors floating around out there are likely to become even more intensified.

(A side note: One of the great advantages of frequent flyer programs is that while they are fairly complicated, at least we have easy acronyms to digest. For instance, we can easily learn what an SWU is, what it is when we fly an EMB or compare O/W to *A and hope and pray for an UG. But CCARDA09 just doesn’t have the same sexiness as FFP terms.) I’ve noticed with some concern the number of resident travel experts out there who quickly scurried at the news of the Credit Card Accountability Responsibility and Disclosure Act of 2009 to proclaim gloom and doom for your credit card miles because of these impending changes to the credit card industry. The rhetoric seems to go like this: “… rules will be changed and your points won’t be worth anything. So grab your award chart and act now or you may not be going anywhere.”

I really hate this type of self-promoting expert advice and solely because the advice almost always uses fear tactics –and not the facts or realities of the industry. So, if you are inclined to fear these changes, then this is as far as you need to read this column.

Let’s put it this way: I’m not in the fear camp. I believe there will be no actions to kill or scale back the current travel rewards cards in your wallet.

Now, you have likely seen some scaling back of rewards from various cash-back cards precisely because a one to three percent cash rebate is actually measurable. This is one of the reasons why travel cards have a distinct advantage in this environment–because your “rebate value” is solely determined by you at the time you decide to redeem your credit card currency–not the controlled and measurable rate that cash-back cards offer.

For those who haven’t followed the advice here or online with our sister Web site FlyerTalk, then you are likely to continue to have that measurable one percent rebate. Others will have parlayed advice into rebates averaging two to seven percent on average.

It is true that a rewards card has been a major factor in how the credit card industry has moved many of us away from our checking accounts as a means of payment. And regardless of the cost of these programs, it is likely to have been worth every dollar of investment.

Just witness the plastic fight currently going on with US Bank and American Express with regards to the credit card partnership of the Delta SkyMiles program and the free agent Northwest WorldPerks members who now have choices to make after the demise of their program. Certainly if these new rules will have that much of a negative effect on customers, we would not be seeing such a hard-fought campaign to move frequent flyers from one card to another.

No, these rules are more likely basics which will put a friendlier face on a banking industry that seems to have had a fair number of aggressive lobbyists.

And I’m constantly reminded from many of my readers that the reason they move their credit card preference from one piece of plastic to another is often just two factors away at any time–1) a bad experience with a change to the basic rules of the program and 2) the buzz of the Internet.

How many of you have been influenced by hearing that another card is a better value than the one you have in your wallet? Better bonus? Lower transaction rate? Or lower international purchase conversion fee? Those criteria for accessing your credit card have long been around and we’ve somewhat made it part of our DNA as frequent travelers to be influenced.

As for the rules change, well, come August we are prepared to act upon our words. You change, we change. It’s really that simple.