In News We Already Know: Credit Card Rewards Get Richer (WSJ Article)

by on March 27, 2012 · 23 comments

in American Express, Chase, Citi

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UPDATE: 50,000 point Sapphire Preferred sign-up bonus offer is now 40,000 points.

Several TPG readers emailed me this WSJ article all about how credit card bonuses have been as high as ever. It’s an interesting read, although not a surprise most savvy TPG readers, with quotes directly from American Express on the state of the credit card industry.

In general: Credit card companies are really competing for consumers with excellent credit scores. While the focus in the past was to get customers who would carry a balance and pay lots in interest fees, with new regulations, taking on that risk isn’t as lucrative. Instead, card companies are looking for responsible borrowers who charge a lot and bring in lots of revenue on the processing side of the house (every time you use a credit card the merchant pays the credit card issuer a fee, usually around 2-3%).

However, these types of credit card borrowers, including many TPG readers, are savvy and want solid rewards and service. So it’s been interesting to see Chase and Citi get extremely aggressive against American Express (who acknowledges as much in this article), which has historically been the main card company for the creditworthy.

Bottom line: If you have good credit – leverage it! The credit card landscape changes with the economy and it’s clear that the competition is as tough as ever. There are still a lot of really good deals out there, like the 50,000 point Sapphire Preferred (which likely drops this week to 40,000), 100,000 Capital One Venture and 50,000 point Amex Platinum.

Two of the most interesting quotes:
“The new deals are part of a broad effort by lenders to woo affluent households as the nation emerges from the financial crisis. High spenders are a “core and coveted group,” says Eva Reda, a senior vice president at American Express. “We are seeing our competitors dial up the energy in this space.”

I imagine this is in response to Chase ratcheting up their Sapphire Preferred card, which emerged from obscurity to become known as one of the best cards on the market – especially for travelers. Amex shouldn’t really be surprised since this sign-up bonus is twice the current 25,000 point offers on the comparable Premier Rewards Gold, and the Sapphire Preferred’s $95 annual fee and no foreign transaction fees handily beat the $175 and 2.7% foreign fees on the Premier Rewards Gold.

“‘These new customers typically have high credit scores, which means banks don’t have to set aside as much in reserves to meet capital requirements that were stiffened in response to the financial crisis,’ says John Grund, a partner at First Annapolis Consulting, an advisory firm focusing on the electronic-payments industry.”

This just enforces the point that you need to have a good credit score to maximize credit card offers. The best way to raise your scores is to pay off your balances and pay your bills on time (or preferably early). Check out this post for more on credit score calculations.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • DrDavidSkoletta

    Completely disagree, in fact in general we are in a huge lull with bonuses and any good deals (see Frugal Travel Guys’ exclamation on this). I honestly think there is a correlation between amount of visibility points blogging has gotten and deals.

  • RakSiam

    Compared to historic bonus offers the current ones are still pretty good. Maybe not quite the heights we saw a year ago, but still pretty good. There seem to be more targeted offers out there these days though rather than as a many lucrative offers open to everyone.

    How big is the audience really for these blogs? I have a hard time blaming them or FT or MP. We all know plenty of people who refuse to play the miles game at all. Those of us who are doing it is a small sliver.

  • ytrewq

    ” Chase recently offered as many as 75,000 points, for customers who take its Sapphire Preferred card. Citigroup earlier this year offered some would-be ThankYou Premier customers 80,000 points. American Express is offering 100,000 points with its Platinum card.” I missed all of these….. Aren’t these about a year old? I only heard about the 50k TYP offer this year (got in on that).

  • Brian(J)

    I looked at my own patterns in response to this article. Although my wife and I acquired over a million points last year (combined) and that is a cost that most of the CC companies won’t recover, we have moved all our spending to Ink Bold or Sapphire, perhaps $70,000 this year. At 2% that is a $1,400 return this year alone on the 310k miles they gave us last year and over time they will get quite a bit more. Meanwhile the CC companies that offer less get nothing from us. This dynamic probably helps drive the competition. Chase seems to have figured out that in order to win a return on the program you must do three things; 1. Offer generous bonus. 2. Provide attractive transfer partners and redemptions. 3. Reward the spending.
    This example shows how being generous also rewards the bank, and may drive them to sweeten the pot.

  • TK

    When I log into my United account it says the United Explorer card is 60K miles (50K upfront/10K after $25K spend)…which credit agencies does this card pull?

  • UWP

    What has been peoples’ experience with the Sapphire Preferred card annual fee?
    I am coming up on a year, and while I do love the card, it’s just not worth $100 a year to me.
    Citi talked me into keeping the Aadvantage cards open for another year because they would wave the fee if I made 5 purchases. Anyone notice Chase doing something similar?

  • lana

    Brian. I had both a chase continental one pass and a united card back in 2010. I combined the miles and in early 2011 I cancelled them both. I wanted to know if I can open a new united explorer card and still get the 50k bonus ? Or will chase consider that I already had a united card and will not give a bonus a second time ? Are those two cards the same or are the considered different. ?

    My other question is, I just applied and receievd the sapphire preferred card. How long should I wait before applying for the united card ?

    Thank you TPG

  • PJ

    my experience: early 2011, I applied CO one pass for sticker price ( 25K) Wife pushed me to cancel it after 25K was posted and statement credit was posted.. did not hurt my chance last month to get the new United Explorer with 50K after just a single purchase.

    normally you need to pace out and wait 60 days for Chase to give you another card. However if you are excellent credit and only have just a few cards getting 2 cards back to back is possible. I know in one household, both husband and wife get both freedom card and Sapphire preferred just in a matter of a few weeks. Plus they all open Checking accounts with Chase and pocket 150 and 200 bonus ( taxable here (

    Best of luck

  • lana

    Thanks, but my case is a little different. I had the continental card and the old united card. So, i want to know if i apply for the new united explorer card, if i will get the bonus of 50k.??

    thanks for the reply

  • Dan

    I got the bonuses on all 3.

  • Niriha

    Don’t know if this has already been mentioned …(tho I do read diligently but Brian has so much information I should get college credits for studying his site)
    I received an offer from United Airlines for a card offering 60,000 miles after the FIRST purchase. I had to spend $3,000 to get 50,000 with the Chase Sapphire card. Though the United card does not seem to have quite the same level of rewards in general as the Chase Sapphire, I like the idea of getting 60,000 right out of the gate so to speak.

  • Niriha

    Correction: It is 50,000 miles with the United card after the first purchase. The additional 10,000 come after spending 25,000 for the year. Still, 50,000 for one purchase is good.

  • Lana

    Dan, you also had the continental and older united card? Then you got the new united explorer card and had no problem getting the bonus? How long ago did you cancel those old cards? Thanks

  • thepointsguy

    The Sapphire is a stronger all around card with better earning/redeeming options. The United card is better for United perks and if you may have trouble hitting the $3k spend for the Sapphire, I’d say go with United. Or get Sapphire now and United once you hit the spend. Why choose one, when you can have both :-)

  • thepointsguy

    As others have reported, you should be able to get the Explorer. The only people who technically can’t get the Explorer card are those who got a Continental/United card after July 2011.

    You should wait at least 1 month before applying for another card and even then you may get denied, so you may have to call the reconsideration line at 1-888-245-0625

  • thepointsguy

    Chase does do retention offers, but I haven’t heard of any recent experiences with Sapphire Preferred. To me the card is so strong with the 2x points, 7% bonus, no FX fees and good transfer partners that the $95 annual fee is well worth it.

  • thepointsguy

    Depends on your state. Check this forum for more info

  • thepointsguy

    A lot of the offers they mention in the article were targeted (which I think they should have made more clear)

  • thepointsguy

    Huge lull with bonuses? Theres currently a CapOne 100k and many 50k (Sapphire Pref, Ink, Southwest, United, Amex Platinum) with sprinkled offers like 75k for Amex business gold in February. While I’d like even more action, I think its hard to say we are in a lull.. its just that we’ve already seen many of the offers currently out there

  • lana

    Thanks. I just received the sapphire. So , ill wait a month for the explorer. One more question. My husband currently has the Chase Sapphire card. He just applied for the sapphire preferred. I hope he is still eligible for the 50,000 bonus points after $3k spend.?? (he wasnt approved or denied right away online. how long does it take for him to hear back from chase. Can he just call them and find out the status?)

    Thanks TPG :)

  • Marylynn

    Any idea what the criteria was for getting the targeted 100k Amex Platinum offer last year? And was it sent via e-mail or snail mail?

  • Afsdfasdfasdfas

    I think this is the year to be sparing with inquiries and avoid applying for cards that won’t get the bonus and not take chances.

    Too many inquiries = higher insurance rates/finance rates regardless of FICO score.

    Not investment advice.

    Also big bonuses like 100k amex plat can sometimes potentially qualify someone for other promos like fly 2 rt get GOLD medallion status.

    Plus I can’t burn the miles fast enough because unlike TPG I have to work a real job which costs me money when I’m not working…..(yeah i’m jealous a little)

  • Nate Cameron

    Interesting that they say the Chase SP card has “offered as many as 75,000 points”… I know people have received targeted offers for as many as 100,000 points in the past six months.

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