Here's what credit card rewards programs might look like after coronavirus

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In just a few short months, the coronavirus pandemic has radically changed the world. While certain industries like travel have been especially hard hit, the pandemic is causing every decision even tangentially related to health, safety and money to come under scrutiny.

Credit card issuers have been scrambling to react to this swift and unprecedented change in consumer behavior, and in the process, they may be printing a road map for what credit card rewards will look like in a post-COVID world.

Today I'm going to walk through the timeline of what card issuers are doing to help customers now, what I think they should be doing, and what we might expect in the future as we chart a slow return to something resembling normal.

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What credit card issuers have already done during the pandemic

While the responses have varied from issuer to issuer and card to card, all the major credit card companies have taken action to provide some kind of relief to customers struggling with bills and to compensate those who are unable to use card benefits this year. You can check out TPG's full guide to the temporary benefits, bonus categories and statement credits, as well as analysis from Katie Genter and me as to whether these steps are enough to retain customer loyalty.

So far, a couple of clear themes are emerging in the way card issuers are responding to the situation. The first is an emphasis that these new perks are temporary and not something we should get accustomed to having around long term. Chase, for example, has added a 5x grocery store bonus category to its premium Chase Sapphire Reserve card, though the 5x earning is capped at $1,500 a month and only applies for May and June. Meanwhile Amex has added limited-time statement credits to The Platinum Card® from American Express for select streaming services and wireless telephone bills through the end of the year.

While these perks are nice, a more frustrating trend I've noticed is that relief is not coming equally for everyone. Chase has offered a $100 annual fee credit for customers who renew their Sapphire Reserve cards between April 1, 2020 and July 1, 2020, while Amex is offering up to $200 in statement credits toward prepaid Amex Travel purchases made between August 2020 and December 2021, only for cardholders who renew their card between April 1 and Dec. 31, 2020. While it's possible that these one-time credits will be expanded to more cardholders if the pandemic drags on into next year, for now, they miss a large swath of the customer base. I for one renewed both my Chase Sapphire Reserve and Amex Platinum cards back in February, meaning I won't get any rebate on my annual fee or offsetting benefit even though I'm unable to use most of my cards' travel-related benefits.

Related: Amex announces limited-time perks for select Amex Membership Rewards, Delta, Marriott and Hilton cards

What card issuers should be doing right now

New bonus categories are always nice, and I'm certainly not complaining about the fact that I now struggle to decide which card to swipe for groceries, but on their own they aren't enough. For most people, the calculus around whether to keep or cancel a premium credit card revolves primarily around statement credits that can help offset the hefty annual fee.

We've seen some relief in this category, with select Amex cards expanding their annual property credits to include U.S. restaurants (including takeout and delivery), but these cards are the exception and not the norm. Simply put, every card that offers an annual travel credit of any kind needs to make that credit valid for groceries, restaurants, food delivery, or some combination of the three until people get back on the road again. Notable holdouts here include the Chase Sapphire Reserve ($300 annual travel credit) and Amex Platinum (up to $200 annual airline incidental fee credit).

Much of the relief efforts so far have focused on the premium credit card market, and that makes sense given how quickly the value proposition of many premium cards has started to unravel, but card issuers need to start addressing the needs of customers with middle-market or no-annual-fee cards as well. I understand that card issuers are cash strapped as well right now and that a universal waiver for all annual fees might be out of the question, but issuers should be doing everything in their power to take cost out of the decision to renew a card. Customer acquisition is an incredibly expensive process, between advertising and offering welcome incentives, and even if it means taking a short-term loss now, card issuers should be working to keep the customers they spent so much money to acquire.

I mentioned half-jokingly the fact that I can't decide what card to use for groceries anymore, but there's something to be said for a lot of the copycat behavior we've seen. Frankly, if every card in my wallet were to start offering 5x points on groceries tomorrow, it wouldn't add any incremental value to me (just like it doesn't help me to get a fourth card that offers a Priority Pass membership). Now is a great opportunity for issuers to differentiate themselves from the competition, and think beyond the obvious spending categories of groceries and food delivery.

Amex has taken the lead here offering credits for streaming services and phone bills and expanding its Amex Offers program to help people save money when shopping from home, but there's plenty more to be done here. A bonus category for Amazon purchases is definitely wishful thinking, but I'd like to see card issuers think harder about where consumers are spending money from home and offer rewards there, instead of playing this never-ending game of copy cat.

What we hope to see moving forward

Several of the major credit card issuers are currently flush with points and miles, having prebought them from airline and hotel partners at a significant discount. Even once we start to return to normal life, many consumers will be carrying the emotional and economic scars of this pandemic for a while to come. Simply put, issuers might have to work a bit harder to incentivize more spending or new card applications, and that comes in the form of higher welcome bonuses, new and improved bonus categories, limited-time transfer bonuses and overall more lucrative benefits. I wouldn't expect a ton of new product launches (given how expensive it is to develop and market a new credit card), but I'm confident that a majority of cards currently on the market will be refreshed in the coming years to make sure they stay up to date with changing consumer preferences.

If you've had to go through the arduous process of trying to get a refund for your travel plans since this pandemic started, you likely fall into the large group of consumers who are going to value flexibility more moving forward. Issuers will be able to win a lot of goodwill by coming out ahead of this trend and making benefits easier to use. Hopefully we'll see more cards offering perks like the $300 travel credit on the Chase Sapphire Reserve which is automatically applied to just about any travel purchase you make, as opposed to the $200 "airline incidental fee credit" on the Amex Platinum that carries so many restrictions that some people find it impossible to use.

Related: What triggers the Amex airline incidental fee credit?

Customers will be less likely to pay a hefty annual fee for a complicated card that takes effort to maximize, especially if there's risk that a second wave of the virus could stop them from using their perks. I hope to see more cards come with built-in flexibility, like the American Express® Business Gold Card. Instead of offering set bonus categories, you automatically earn 4x Membership Rewards points per dollar on your top two spending categories a month from the following list, up to $150,000 total per calendar year (then 1x):

• Airfare purchased directly from airlines
• U.S. purchases for advertising in select media
• U.S. purchases for shipping
• U.S. purchases at gas stations
• U.S. purchases at restaurants
• U.S. purchases made from select technology providers of computer hardware, software, and cloud solutions

Card issuers want to be the top card in your wallet — the go-to card you use for most of your purchases without having to think twice about it. Building flexibility into the product itself is one easy way to do that.

Bottom line

Even after several months of lockdowns and travel restrictions, it's too early to say exactly how the world is going to change as we restart the economy and learn to live with COVID.

Card issuers have been working to address changing customer behavior already, and while many of these benefits are marketed as limited-time offers they may end up becoming permanent as spending patterns shift and customers place a higher premium on flexible benefits moving forward.