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The Points Guy believes that credit cards can transform lives, helping you leverage everyday spending for cash back or travel experiences that might otherwise be out of reach. That's why we publish a variety of editorial content and card comparisons: to help you find a great card to turn your goals into reality.
Our site may earn compensation when a customer clicks on a link, when an application is approved, or when an account is opened with our partners, and this may impact how or where these products appear. While we don't cover all available credit cards, our editorial team creates and maintains all of the analysis of these cards, and our content is not influenced nor subject to review by any credit card company, bank or partner prior to (or after) publication. Please view our advertising policy and product review methodology for more information.
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The top innovations in credit card benefits of 2020 — and TPG's Editor's Choice award winner
Chris was a reporter at The Points Guy, where he covered the intersection of credit card rewards and travel. At TPG, he wrote a broad array of stories ranging from in-depth features and reports to trending travel news as it related to loyalty, card benefits and consumer behavior.
December 2, 2020 • 10 min read
The cards we feature here are from partners who compensate us when you are approved through our site, and this may impact how or where these products appear. We don't cover all available credit cards, but our analysis, reviews, and opinions are entirely from our editorial team. Terms apply to the offers listed on this page. Please view our advertising policy and product review methodology for more information.Editorial disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.
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Quick summary
Credit card benefits shifted significantly in 2020 to reflect changes in consumer behavior, with less travel and more spending at supermarkets, streaming services and online merchants.
Many cards introduced limited-time elevated rewards for categories like groceries, dining, gas and online shopping to align with stay-at-home trends.
New redemption options allowed points to be used for everyday purchases such as food delivery, streaming services and home improvement, often at enhanced rates.
Retention offers, statement credits and branded partnerships with fitness and delivery services became more common to encourage cardholder loyalty.
What to consider
Several limited-time offers and elevated redemption rates had specific end dates, with many expiring by April 30, 2021 or earlier.
Some redemption options were only available for select categories or required purchases at qualifying merchants.
The article notes that some offers mentioned are no longer available.
What you'll miss from the article
A detailed comparison of the year's most innovative card benefit updates and expert insights on maximizing value from evolving perks.
Generated by AI with support from our editorial team.
Update: Some offers mentioned below are no longer available. View the current offers here.
Nearly every industry has seen drastic changes in 2020.
Last month, we outlined the year's major developments in airline loyalty and safety during Aviation Week of the TPG Awards — including our TPG Editor's Choice winners in each category.
Credit card issuers — and the impact they have on consumers — are no different. With consumer behavior and many of life's priorities transformed from a year ago, card benefits have had to adjust. And adjust they did.
As part of these new and shifting benefits, card companies have announced some exciting innovations this year. Let's parse out a few of them and award one issuer with an Editors’ Choice award for best card benefit innovation of 2020 as part of Credit Cards Week at the TPG Awards.
Earlier in the spring, travel was severely curtailed. And even this holiday season, it remains diminished with a resurgent wave of COVID-19 cases throughout the U.S.
One of the first major changes we saw involved bonus categories. Starting in the spring, many issuers launched limited-time, enhanced earning rates for specific types of merchants, allowing cardholders the opportunity to take home extra points or miles on a variety of purchases.
Here are some of the most notable updates.
Groceries and streaming
In the spring and summer months, nearly every travel rewards card competed with each other in the hotly-contested grocery and streaming category. In fact, for a brief period, nationwide grocery spending soared due to stay-at-home measures from coast to coast. And issuers wanted a piece of the supermarket pie.
(Photo by Hananeko_Studio/Shutterstock)
Travel cards such as the Chase Sapphire Reserve offered a limited-time 5x bonus on groceries to entice spending (now down to 3x through April 30, 2021) at a time when travel simply wasn't happening. The Reserve also offered a bonus of 10x on streaming services while stuck at home (offer since expired).
Numerous other non-travel categories emerged with elevated bonuses or credits. Gas and dining took center stage as lockdown measures were lifted but long-distance travel remained limited. For instance, the Marriott Bonvoy Boundless Credit Card increased its regular restaurant and gas bonus from 2x points to 10x points over the summer (now expired).
Using points and miles towards travel is often the most lucrative way to redeem them, but it's far from the only way.
With many people staying closer to home — and sitting on a glut of points and miles — issuers revealed new ways to redeem. For instance, through the end of April 30, 2021, Capital One cardholders can use their miles for purchases made in the past 90 days on food delivery and streaming services.
(Photo by Phil Barker/Future Publishing via Getty Images)
Chase also introduced a new redemption option called Pay Yourself Back, providing a higher redemption rate when you use points to cover gas, grocery and home improvement purchases.
In fact, it's the same rate you get when redeeming through Chase's travel portal: 1.5 cents per point for Chase Sapphire Reserve and 1.25 cents per point for Chase Sapphire Preferred cardholders. These accelerated rates are valid through April 2021 — and were even added to new cards in the fall.
In recent months, generous sign-up bonuses and welcome offers have returned to entice applicants thinking about a new card.
However, the issue of retention remains. How do card issuers ensure people will keep their cards — especially travel-focused ones — when it's time to renew?
For instance, in addition to individual retention offers for cardholders who call in, Amex also emailed select cardholders to offer them renewal bonuses. These “appreciation credits” (what Amex called them) are statement credits following account renewal.
In other words, Amex — and other issuers — have been dangling carrots in front of cardholders to entice them to keep their cards.
Branded partnerships
The year 2020 showed that cobranded partnerships are here to stay — and will be here for the long haul. For instance, in recent weeks, Amex and Chase went head-to-head in the at-home fitness space to provide benefits to premium cardholders by partnering up with Equinox and Peloton, respectively.
(Image courtesy of Peloton)
Historically, Chase has also been aligned with Lyft while Amex is in close relations with Uber. In fact, it was recently announced that the American Express® Gold Card would get a brand-new benefit starting in early 2021: up to $120 annually ($10 per month) in Uber Cash, which can be used on Uber Eats orders or Uber rides in the U.S. Card must be added in Uber app to receive Uber Cash benefit.
These are just two of many examples where new card benefits lie at the intersection of branded partnerships.
TPG Editor's Choice winner...
All the card issuers announced a variety of benefit updates to align with the shift in how we all spend. However, one particular benefit came out on top.
Chase's Pay Yourself Back
Our 2020 winner for the most innovative credit card benefit goes to Chase with its Pay Yourself Back program.
From the early months of the pandemic, Chase expanded how you could redeem Ultimate Rewards points for its Sapphire card lineup of the Sapphire Preferred and Sapphire Reserve. Best of all, the redemption rate was fixed at the exact same level it would be to redeem for travel through the Ultimate Rewards travel portal.
The program was extended recently to go through at least April 30, 2021. Chase Sapphire Reserve customers can redeem points at 1.5 cents apiece, while Chase Sapphire Preferred customers can redeem Ultimate Rewards at 1.25 cents each to offset purchases made at grocery stores, home improvement stores and dining establishments, including take-out and delivery services.
With robust frequent flyer and hotel program points balances, many TPG staff members and readers alike have found these redemptions to be a good use of Ultimate Rewards points.
Finally, if you have a Chase Freedom (no longer available for new applicants), Chase Freedom Unlimited or Chase Freedom Flex, you can redeem points at 1.25 cents apiece toward donations made to eligible charitable organizations through Dec. 31, 2020. Additionally, Ink Business Preferred® Credit Card and Ink Plus Business (card no longer available) points are worth 1.25 cents each toward online advertising and shipping purchases, also through Dec. 31, 2020.
Bottom line
Chase Pay Yourself Back led the way this year with an enticing opportunity to redeem points on non-travel purchases. The other major issuers — including Amex, Citi and Capital One — have some catching up to do when it comes to the value of using points for everyday purchases.
Even with all of these updates in 2020, I don't expect the innovation in this space to end in 2021. In fact, it should only accelerate as issuers feverishly compete for a larger share of our business. With travel hopefully back into the picture later in 2021, issuers will have to strike a balance between travel-related benefits and continuing with limited-time perks for staying closer to home.
From new (and better) ways to redeem to additional category bonuses and perks, the year ahead looks to be as exciting as ever.
Comments
By commenting, you agree to our Community Guidelines to help create a positive space for conversation. The responses below are not provided or commissioned by the bank advertiser, our partners, or The Points Guy (“TPG”). They have not been reviewed, approved, or otherwise endorsed by any of these parties. All responses are submitted by individual contributors, and neither the bank advertiser, our partners, nor TPG are responsible for ensuring that all posts and/or questions are answered.
