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Million Mile Secrets reader Jerry (thanks!) forwarded me an article in the New York Times titled Practicing Prudence in Picking Travel Cards. This article adds another data point to my view that marketing budgets for credit cards have been higher than usual, and that we can expect to see a reduction in the generous offers we are used to or an increased spending requirement to get those bonuses.
For example, the limited time Chase British Airways card now offers 50,000 points after your 1st purchase, and requires you to spend $10,000 within 1 year to get an additional 25,000 points and yet another $10,000 to get the last 25,000 points. Compare this to the offer in 2009 and 2011 when folks could get 100,000 British Airways miles with only $3,000 in spending!
Similarly, the Chase Ink Bold now requires you to spend $10,000 within 3 months to get the full 50,000 point bonus. However, you get 25,000 points after your 1st purchase and another 25,000 points after spending $10,000 within 3 months.
And we’ve seen a few 1-day American Express offers which had very high spending requirements as well.
While this is bad in comparison to what we’ve been recently used to, it isn’t all bad news. This just marks a reversion to the level of sign-on bonuses which used to exist only a few years ago. A 25,000 point bonus on the Chase Ink Bold or a 50,000 sign-on bonus on the British Airways card after your 1st purchase is only bad in comparison to what was available last year and early this year!
After all, why should banks give mega bonuses to ALL new customers? It is much better for them – especially after recent regulations have cost them billions of dollars in profitability – to offer a minimum level of enticements to regular customers to get them to sign-up for the card. But to offer further sweeteners to folks who spend lots of money on their credit cards and earn the banks fees.
The article starts by saying:
With all these frantic credit card merchants beseeching me these days, I feel as if I’m a tourist wandering the Marrakesh souk.
I know some readers feel overwhelmed about constantly reading about credit card offer, but that’s because there really ARE a lot of new credit card offers. Here’s what the head of Chase Card Services has to say (bolding mine):
“I’ve been in this business a long time and there definitely have been times of very aggressive marketing of airline and other travel cards,” said David Gold, the general manager of Chase Card Services. “We happen to be in one of them now.”
So many of your hunches are confirmed. We really are (or is it were?) in the midst of some great credit card offers.
He also confirmed that Chase wants to take market share from AMEX, which may explain why all the good offers seem to be only from Chase!
Meanwhile, Mr. Gold said that the new United MileagePlus Club Card was intended in part to take market share from the American Express Platinum card.
Many readers also mention that keeping track of so many credit cards can be a pain. But don’t worry, the head of Chase card services agrees with you!
Although, as even Mr. Gold at Chase conceded, “it can all be a pain to keep track of.”
Bottom Line: I don’t expect credit card sign-on bonuses to disappear, but it will be harder to get the full sign-on bonus on many of them. But getting half a sign-on bonus is still better than NO sign-on bonus. Sure it is not as good as it used to be, but it will still let us have Big Travel with Small Money!