Credit cards: The end of the benefits bonanza?
“When a Wall Street banking institution starts throwing 100,000-point bonuses at credit card customers, it may be best to grab them before they inevitably disappear,” said Ron Lieber in The New York Times. Alas, disappearing is exactly what’s happening to the eye-popping sign-up bonus for the Chase Sapphire Reserve credit card. The card debuted this past summer with an offer of travel rewards worth up to $1,500 to customers who spent $4,000 in their first three months (albeit with a $450 annual fee). Now JPMorgan Chase is cutting the generous sign-up bonus in half, to 50,000 bonus points or $750, though people who apply at a Chase bank branch by March 12 may still qualify for the original bonus. The phaseout was probably inevitable. Chase figures that it lost as much as $300 million handing out perks for the Sapphire Reserve, which was so popular when it was introduced that the bank temporarily ran out of the metal used to make the cards. “In card land, any offer this lucrative tends not to last.”
“It’s likely to be another good year to shop for rewards cards— even after the end of the 100,000-point deal at Chase,” said Susan Tompor in the Detroit Free Press. Chase’s introductory bonus was always destined to go away, but analysts expect a steady stream of enticing offers from card issuers looking for an edge in a highly competitive market. To make the most of offers, “experts recommend rotating your spending among two or three rewards cards,” said Miriam Cross in Kiplinger’s Personal Finance. Domestic travelers who spend less than $8,600 a year on travel are better off using a cash-back card for everyday purchases, ideally one that offers more than 1 point per dollar spent. Then, think about adding a card that offers big returns on specific categories like gas or groceries. International travelers, however, “should focus on using a travel rewards card.”
Is signing up for the Chase Sapphire Reserve still worth it? asked Taylor Tepper in Money.com. Turns out, even the new $750 sign-up bonus “is still miles ahead” of rivals Citi Prestige and American Express Platinum. Of course, there’s still that $450 annual fee, but card users can earn up to $300 in additional travel credit, plus three points for every d ollar spent on travel and dining. “So if you’re going to grab the bonus and run, then the Reserve will still be a great bet.” “The perks of rewards come with a hidden price,” said Tom Anderson in CNBC.com. Rewards cards in general tend to charge more interest than non-rewards cards. The average interest rate for a credit card is 15.33 percent, while the Reserve card starts at 16.24 percent. “As with any credit card, the devil is in the details.”