Frequent flyer programs impacted by bank financial problems

A recent Budget Travel magazine newsletter included a story from the Wall Street Journal in which they reported our usage of banked mileage for travel is changing. Budget Travel encourages readers to cash in before new restrictions go into effect or worse.
Quoting from their newsletter:

Cash In Those Bank Reward Travel Points

“A side effect of the financial problems of banks is that credit-card rewards programs are vanishing, especially for travel. Citibank, for instance, will soon require credit-card holders to spend a certain amount each month before being able to earn points for travel. And travel rewards will become more difficult to redeem.

On March 1, Citibank will make a key change to its ThankYou Rewards program for credit-card holders. You’ll have to spend a certain amount each month on your credit card before you’ll be able to earn points for travel.

And travel rewards will become more difficult to redeem, according to a story by the Frugal Travel Guy.  For example, today you can redeem Thank You points for different types of tickets once you’ve reached a threshold, such as by redeeming 90,000 ThankYou Points for a business-class ticket worth up to $2,,700. But under the system the company is about to set up, you’ll need to have 100 points per every dollar of airfare. So a $2,700 business-class ticket now requires 270,000 points.

(Citibank defends the move by stating that it will now include the price of taxes and fees as part of the reward. Right now members have to pay the airline taxes and fees for reward tickets.)

Other news items:

“Last month, American Express eliminated double miles for shopping in a broad range of categories on its Delta SkyMiles card.” This may be partly driven by Delta’s merger of its frequent flyer program with Northwest‘s program (The blog One Mile at a Time has sound advise on the best uses of American Express Membership Rewards.)

Chase scaled back the cash-back bonus opportunities on its Freedom card for new costumers.”

Capital One’s new No hassle Rewards card requires customers to spend at least $1,000 per month in order to earn double miles for each dollar above that threshold. (Customers earn one mile per dollar spent on all other, non travel purchases.)”

Banks partly blame the airlines, some of which are hiking the mileage thresholds required to redeem free flights.

Banks are also getting more likely to revoke your points before you get a chance to use them, says the Journal:

If you’re late not only will you likely see your interest rate jump, but you’ll also probably forfeit reward points. Under American Express’ Membership rewards program, for example, members who pay late will forfeit their points for that month (although they can reinstate those points by paying a $29 fee).

Additional suggestions from Budget Travel. “Don’t bank those points. If you have a stockpile of rewards points, consider redeeming them for rewards now before they are likely to be devalued. They close reporting “the value of travel points earned in the iDine program have been cut in half, says the mileage blogger Gary Leff.”

Gilbert closing comment. While I plan to contact Citi and Chase to question their pending rewards travel changes I am submitting this information to all Juice readers as a public service announcement. Each of us that utilize these programs have a responsibility to inquire as to possible changes with their personal frequent flyer programs.


About Larry Gilbert