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A news broke in early 2019, which made credit card enthusiasts shudder: the banks withdrew their reward points. In fact, this has been going on for some time, especially in 2017, when Chase halved the registration bonus of his Sapphire Reserve card. But as the number of people learning to use the system to earn free travel and other benefits has increased, card issuers have become even more desperate to halt their losses and find a way to limit the losses of credit cards, which involves opening a new account. just for the sign-up bonus, then go to the next card with a big bonus offer.
The recently updated American Express Gold Card is the latest example of a reduction in signup bonuses. "Instead of giving a 100,000-point sign-up bonus, like the Chase Sapphire reserve, they offer a 25,000-point sign-up bonus, with four points per dollar for a daily meal, "says Brian Kelly, founder and CEO of Points Guy.
As a person who runs more than a dairy, I am worried about what it means for those of us who rely on reward points for affordable travel. Sign up bonuses of up to 75,000 points, for example, for the Starwood Preferred Guest Card, are the easiest to collect. Thus, the threat of their decline – or worse, their elimination – could have a catastrophic effect on low-budget travelers like me.
Fortunately, it does not seem so bad. "Banks are not going to get rid of reward points," says Matt Schulz, chief industry badyst at CompareCards. "If they do, there will be people who will say," Why do I even have a credit card? "And the banks do not want it."
Nevertheless, it will become more and more difficult to gain points at the start and then to rebound. "What we are going to see is that credit card issuers are trying to give people more reasons to stay and give their current customers more money for their money," says Schulz.
This could mean an increase in points earned per dollar spent, as well as loyalty rewards. "Instead of big, flashy sign-up bonuses, we're seeing more sustainable offerings over time," says Kimberly Palmer, credit card expert at NerdWallet.
Despite the changes, "Overall, there are more points than ever before," says Kelly. You just have to be a little more creative with the way you win them. So, instead of giving up credit card rewards, it's time to get down to business and find ways to get more value. Here are the best strategies:
Keep an eye on the biggest bonuses
Even if the number of cards with epic bonuses decreases, they will not go away. We will now need to keep a close eye on the industry to make sure we find the best deals when they are in vogue. Sites like CreditCards.com, NerdWallet, CompareCards, and Guy Points follow all the changes religiously, and you'll also see ads about them if you pay attention. Many of the best bonuses only last a few months – the current offer for Southwest's Rapid Rewards Plus ending Feb. 11, for example – so timing is paramount.
A big problem is that you can not be eligible for signup bonuses even if your card is approved. Citi, for example, will not give you a sign up bonus if you have opened or closed a family card in the previous 24 months. The Guy Points offers a guide to restrictions that explains the ins and outs of all major card issuers.
Make sure you will be approved
Even though I have an excellent credit score, one of the last cards I applied for was not accepted. Why? I had opened too many other accounts in the last year. "Make sure you know if the issuer has a specific policy that limits the number of new cards you can open on a given period, the number of cards you can have with them or if you are not not eligible for the sign-up bonus because you have a similar card, "Greg McBride, Chief Financial Analyst at Bankrate.
Chase will refuse your application for a new card if you have opened more than five accounts of any company or bank in the last 24 months. You may also be denied if your credit score is too low. (CompareCards has a handy list of average credit scores needed to get popular cards.) Being denied for a card does not hurt your score per se, but applying for any card temporarily lowers your score, so you do not want to what to make a request. cards that you are sure to qualify and adjust your applications.
Choose cards that reward your spending habits
Once you have exceeded the signup bonuses, look for the cards that earn the most points for your daily purchases. Spend a ton of shopping and gas? The American Express Blue Preferred Cash offers a huge discount of 6% in grocery stores and 3% in gas stations. "Depending on your expenses, your reward points are worth hundreds or even thousands of dollars a year," says NerdWallet's Palmer. The $ 200 welcome offer will also cover the $ 95 annual card fee for two years.
Love to travel? The Southwest Rapid Rewards Plus Card offers you both a 30,000-mile sign-up bonus and an unlimited pbad for Southwest Airlines the rest of the year after spending $ 4,000 in the first three years. month. You can also extend the free Companion pbad until the end of 2020 if you earn 110,000 points in 2019. This may seem like a lot, but the points keeper has a clever talent to accumulate these points at a relatively advantageous price.
Switch to a multi-card strategy
Suppose you want to book a flight on Delta that costs 30,000 points, but you only have 20,000 points left in your SkyMiles account. Do you have to pay money for the remaining amount? No way. Instead, transfer their points to your airline accounts from an existing card, such as Citi, Chase, Capital One and American Express.
It can be confusing to have more than three cards, so try to stick to that first. Palmer recommends the use of a flat-rate refund card for everyday expenses, such as the Citi Double Cash, which allows you to recover 2% of everything. Then use a targeted card for categories for which you spend a lot, such as groceries or trips. Finally, if you often find stores in a store, ask for their store card. You will often find offers like a 5% cash back or a 10% discount on all purchases.
Kelly from The Points Guy recommends what he calls the "Chase trifecta", which makes sense only if you also need a map for your business expenses. But by holding more than one Chase card, you can take advantage of several signup bonuses, and then transfer points from one card to another to get more value for them when redeeming them.
Pay attention to the benefits that disappear
While new benefits appear all the time, others go away. For example, Discover has extended product warranty, purchase protection, return guarantee, car rental coverage and flight accident insurance in 2018. No single price protection and from this summer, the United Explorer card will lose the protection of its trip cancellation coverage will increase from $ 10,000 per trip to only $ 1,500 per trip.
Losses are often offset by new offers. "I see a trend in hotels and airlines offering the opportunity to redeem points not only for travel but also for experiences," Kelly said. "Hilton has just allowed members to exchange tickets for Grammys, which you can not even buy."
Spend points as soon as you can
"Over the years, we've seen points and miles lose value," says Schulz of CompareCards. Flights that once cost 10,000 points often require 40,000 points or more to book. "The best thing for people who have a lot of points is to use them and not keep them, because they will not be worth more with time."
McBride of BankRate adds: "Do not keep your miles and your points. This is not a bank account. This is not an badet that is gaining value. Many credit cards will honor your points only as long as your account is open. Therefore, if you want to avoid paying the annual fee to keep the card for an extra year, start shopping for rewards exchanges. This is not a problem with airline cards, however, since your points come in the form of frequent flyer miles that last as long as you are part of their loyalty program.
Make every point count
In addition to letting your points expire, the worst thing to do is spend them for insignificant purchases. "Do not lose your points right now and do not use them for nonsense," suggests Kelly. "Plan an extraordinary journey that will change your life. It may seem discouraging and expensive, but when you break it down and focus on each step – the flight, the hotel – it's a lot easier. Plan a dream trip and step back from there.
Follow Jenny Hart on Instagram and Twitter.
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