Goodbye to Airline Miles?
May 24, 2009
In light of Obama's credit card reform legislation, credit card companies are arguing that the glory days may be coming to a close for their most responsible customers. That could mean an end to airline miles, cash back and possibly even annual fees.
I wonder how much of this is a PR stunt simply designed to generate opposition to the credit card reform bill. I have one credit card and have never carried a balance on it. It seems like these threats of fees and reduced bonuses are being marketed to people like me. Further, I'm supposed to be upset that I can't get as much cash back because some other irresponsible borrowers won't be able to flood the banks with profitable interest payments and fees.
From where I'm sitting, it seems like my credit card has already made major cutbacks. I used to be pleasantly surprised to see how much cash back I would get at the end of each month. I recently made a few big travel purchases and barely got enough cash back to get a Big Mac meal at the airport. It's too bad that I don't get as much cash from the credit card company anymore, but I'm not upset. I probably don't need any extra incentives to spend my money right now, anyway.
If I'm asked to start paying the credit card company each year for the right to have a card, I'll probably cancel the account. Yes, most banks desperately need cash right now, but certainly there will be someone willing to buck the trend and offer decent cards to responsible customers. If not, my bank, ING Direct, offers a credit line on my interest-yielding checking account. I've never used it, but in theory, I probably don't even need a credit card at all.
Of course, there is another option that the banks aren't talking about: accept lower return from the credit card business.
I wonder how much of this is a PR stunt simply designed to generate opposition to the credit card reform bill. I have one credit card and have never carried a balance on it. It seems like these threats of fees and reduced bonuses are being marketed to people like me. Further, I'm supposed to be upset that I can't get as much cash back because some other irresponsible borrowers won't be able to flood the banks with profitable interest payments and fees.
From where I'm sitting, it seems like my credit card has already made major cutbacks. I used to be pleasantly surprised to see how much cash back I would get at the end of each month. I recently made a few big travel purchases and barely got enough cash back to get a Big Mac meal at the airport. It's too bad that I don't get as much cash from the credit card company anymore, but I'm not upset. I probably don't need any extra incentives to spend my money right now, anyway.
If I'm asked to start paying the credit card company each year for the right to have a card, I'll probably cancel the account. Yes, most banks desperately need cash right now, but certainly there will be someone willing to buck the trend and offer decent cards to responsible customers. If not, my bank, ING Direct, offers a credit line on my interest-yielding checking account. I've never used it, but in theory, I probably don't even need a credit card at all.
Of course, there is another option that the banks aren't talking about: accept lower return from the credit card business.
