Survey Request Is the earning of miles/points through credit cards also about to become MOSTLY 'revenue-based'?

Discussion in 'General Discussion | Miles/Points' started by NYCUA1K, Jun 13, 2015.  |  Print Topic

?

Is the earning of miles/points through credit cards also about to become 'revenue-based'?

  1. It looks that way...

    8 vote(s)
    66.7%
  2. Definitely not!

    1 vote(s)
    8.3%
  3. None of the above...

    3 vote(s)
    25.0%
  1. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,747
    Likes Received:
    5,090
    Status Points:
    4,270
    Gary Leff just had a post on his blog titled "Banks Don’t Want Your Credit Card Business Unless It’s for the Long-Term", which made me wonder whether the credit card issuers were not also moving toward some form of revenue system in awarding points/miles earned through CCs by essentially clamping down on how often a person can apply for the same card, thereby decreasing points/miles from "churning" to favor those who do a lot of actual spending on their CCs.

    While it seemed to come as a shock to many of Gary's readers that Banks Don’t Want Your Credit Card Business Unless It’s for the Long-Term, I’d predicted about two years ago right here on MilePoint that this would eventually happen. The practice of getting a bunch of cards just for the sign up bonus points or miles and then getting rid of the cards, often before the annual fee was due, was bound to irk the card issuers sooner or later and it appears that it now has, so they’re doing something about it. The clamping down may actually get worse and nothing anyone says is likely cause the card issuers to reverse course…

    If one steps back, looks at the big picture and reads many of the comments on Gary's site deploring the clamping down by the card issuers (e.g., one reader wrote: “I get what Chase is trying to do, but they are catching good customers up in this new policy change. I’m seriously considering going to Citi TY points and being done with Chase over this. “) , one would recognize the situation as analogous to what happened when Delta and United decided to switch to the revenue-based FF system, which was purportedly designed to reward big spenders. This seems to be almost exactly what credit card issuers are now trying to accomplish. Only big spenders may now earn significant numbers of points or miles through credit cards — by getting cards for the long term and actually spending! Gone may be the easy points from sign up bonuses, which @gleff had, in fact, predicted would become the primary source of miles/points after DL and UA switched to the revenue system. Well, it appears that he was wrong because CC issuers may also be switching to what can be loosely characterized as a revenue system in which to earn significant numbers of points/miles through credit cards, one would be required to do quite a bit of actual spending...;)

    Chime in!
     
    Newscience, 8MiHi and satman40 like this.
  2. satman40

    satman40 Gold Member

    Messages:
    2,499
    Likes Received:
    2,471
    Status Points:
    1,325
    I have received 5 new cards this year, and have applied for over 60 cards, on my credir report over the years.

    Is the day over NO, will the miles required go higher YES.

    Banks do want you to hold the card longer, my AA EXEC Card is Free this year, with the renewal retention offer, Citi also gave me a Platimun Card this week. 50 k.

    It is a business, everyone does not play this game and many who do, does not play it very well...we all leave miles on the table.

    Banks want your business, if you spend and pay your bills.

    Bloggers want you to apply, and bank want you to apply....

    Barclay has ask me to hold my card longer once, but the Red Avator card is in my pocket, and I applied for many U.S. Air cards, during the flights..

    In the early days United limited us to 10,000 miles a month, before MS...today my United Business is unlimited, which I applied for less than 3 months ago.

    Chase is still bring on new cards, and so are the other banks..they want the numbers, and even the banks are For Sale, Looks good on paper...

    Very few handle Credit or CC very well, the banks are betting on it. Even auto pay has a minimum amount you can check, or pay the full amount...

    Wrong check,,and you have a large interest fee.,.Bank Wins..
     
    Last edited: Jun 14, 2015
    NYCUA1K likes this.
  3. 8MiHi

    8MiHi Silver Member

    Messages:
    1,015
    Likes Received:
    1,255
    Status Points:
    945
    It is likely that there will be a movement that starts with limiting those who are allowed to get the big miles. The people who post here as elite FFs may not be affected by such a change very much.
    It seems likely that as the processes used to determine potential profitability of a card holder becomes more sophisticated, factors such as turnover history and past spend may loom larger in the mosaic of information used to determine eligibility for some banks. I don't think the ability to churn will end because this is still very much a market share business, but you might see banks going for better rewards for retaining their better customers and trying to deter the churners.
     
    satman40 and NYCUA1K like this.
  4. newbluesea
    Original Member

    newbluesea Gold Member

    Messages:
    2,687
    Likes Received:
    4,743
    Status Points:
    2,570
    This is news? Isnt that pretty much what is happening already? :)
     
    satman40 likes this.
  5. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    Wonder what happens to the manufactured spending party if banks catch on to the fact that MS customers are not really profitable or particularly desirable; they're just sloshing money around the financial system and working it for arbitrage, One Rite Aid Or Target At A Time, as it were.
     
    satman40 and NYCUA1K like this.
  6. Counsellor
    Original Member

    Counsellor Gold Member

    Messages:
    1,221
    Likes Received:
    1,620
    Status Points:
    1,120
    The question is, of course, "Profitable for whom?"

    If the credit card processor gets its swipe fee, does it matter to the processor (or the card issuer) whether the underlying transaction was manufactured or not?
     
    satman40, 8MiHi and NYCUA1K like this.
  7. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,747
    Likes Received:
    5,090
    Status Points:
    4,270
    This is a very good point. The card issuers do not really care how they are paid as long as they are paid, with whatever fee they charge included...
     
    satman40 likes this.
  8. daninstl

    daninstl Gold Member

    Messages:
    1,288
    Likes Received:
    1,677
    Status Points:
    1,120
    It's just a guess but I would imagine the credit card companies won't be able to contain themselves long term. There will be seasons of less rewards or lower signup bonuses but when a credit card figures they reward you with 1 point per $1 and that point cost maybe 1 cent and they get 3 to 5 cents per $1 transaction I think they will continue to issue cards. It's like an addicted gambler. They will dial it down for awhile and see profit margins increase slightly but they will see card applications drop and see it as missed opportunities. I also think Barclay and BofA will push Chase, Citi and Amex. They will be the rouge cowboys in the game. Banks like Wells Fargo, US Bank, etc. will maintain the status quo but may lose customers as BofA and Barclay look for opportunities.

    I also think we will see a major clamp down on mfg. spending. Not just because of the points earnings but the money laundering related issues from banking and the feds.
     
    satman40 and NYCUA1K like this.
  9. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,747
    Likes Received:
    5,090
    Status Points:
    4,270
    The similarity to the legacy vs. revenue FF systems continues in that some of us who hate the revenue FF system are hoping that AA would remain the "rogue cowboy" and that the rest of the world airlines won't jump on the DL/UA r-b.s. bandwagon, which might cause the latter two to reconsider the wisdom of the revenue system...
     
    satman40, daninstl and Counsellor like this.
  10. eponymous_coward
    Original Member

    eponymous_coward Gold Member

    Messages:
    1,901
    Likes Received:
    2,975
    Status Points:
    1,470
    Most of the rest of the world is already on it, in one sense. Cheap economy fares give you 70%, or 50%, or 25% or 10% earning miles for airlines like KE, BA, SQ, CX and so on. It's the USA that was the anomaly in not tying fare value to mileage value.
     
    satman40 likes this.
  11. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,747
    Likes Received:
    5,090
    Status Points:
    4,270
    Sure. Many airlines do award partial mileage for various Y fares or a bit more for premium cabins, but with the difference vs. the r-b.s. that the unit of measure is still the distance traveled and not the ticket cost. I typically purchase Y tickets that always give me 100% of the miles flown, even if they cost me a bit more than other discounted Y tickets. So, what the rest of the world and even US carriers (AA,.e.g) use is the same as legacy FF, with ticket costs built in but miles awarded based on distance traveled. Not only is it a big difference, but that system also rewards big spenders -- the purported rationale for the r-b.s. -- in a way that maintains some fairness because a mile is a mile, and that's what one pays more or less for...**

    **post changed to use the present tense to avoid making the legacy FF system seem like a thing of the past...
     
    Last edited: Jun 15, 2015
    satman40 and Counsellor like this.
  12. Wandering Aramean
    Original Member

    Wandering Aramean Gold Member

    Messages:
    28,233
    Likes Received:
    61,782
    Status Points:
    20,020
    Old news being rehashed to drum up more CC sign-ups today. Shocking.
     
    satman40 and daninstl like this.
  13. NYCUA1K

    NYCUA1K Gold Member

    Messages:
    4,747
    Likes Received:
    5,090
    Status Points:
    4,270
    Except that sign-ups already fail....today...meaning a dubious advantage for anyone to drum up old news; a belated realization, perhaps? Or even denial?...See, for example, this comment by a reader of the linked piece:
    QED...;)
     
    Last edited: Jun 15, 2015
    satman40 and daninstl like this.
  14. satman40

    satman40 Gold Member

    Messages:
    2,499
    Likes Received:
    2,471
    Status Points:
    1,325
    If the banks, and the airlines did not make a profit they would not do it.

    Profit is the bottom line, without it they would close.

    Big Churns make Good Press, and attracts an ever changing clientele.

    We all change, we all move, and we all spend...

    Miles have never been easier to gain, they also have never been worth less.

    Personally I have far more than I will need, but then I am in the top 1% all you need to do is apply yourself, just like in the real world of life...

    Not everyone wants a MM, nor a M$,

    Plant a garden, it will grow more veggies than you need.
     
    8MiHi likes this.

Share This Page