Cards tweak their terms from time to time – but when those changes involve the value of the rewards, we take notice.
And that’s the case with the changes Barclaycard has rolled out on its Arrival (no annual fee) and Arrival Plus ($89 annual fee) cards. The changes are already in effect for new cardholders. For existing cardholders, when the changes will hit depends on how long you’ve had your account (expect a notification from Barclaycard explaining this).
The changes include:
- Lower redemption bonus: You used get 10 percent of your miles back whenever you redeemed rewards. Now you get 5 percent.
- Redemption bonus extended to non-travel redemptions: In the past, only those redeeming for statement credits against travel got the redemption bonus. Now, those redeeming for cash back, gift cards and merchandise will get 5 percent of their miles back. Please note, however, that redeeming for travel fetches the highest per-point value with this card; even with the extension of the redemption bonus, redeeming for anything other than travel yields a poor value.
- Higher redemption threshold: You’ll need to redeem at least $100 (10,000 miles) when redeeming for travel. The threshold used to be $25 (2,500 miles). For cash back and gift cards, the redemption minimum is 5,000 miles for $25).
- “Tourist attractions” removed from the travel category: This subsection of the travel category was never well defined when it got added in 2014. Now it’s gone.
- No more TripIt Pro: The Arrival Plus card used to include a complimentary subscription to TripIt Pro, a $49-per-year value. The service allows you to organize your travel plans by storing your itinerary, providing travel updates and helping you track points.
Time to ditch the card?
This depends greatly on which version of the card you have – the one with no annual fee, or the one that costs $89 a year.
No-annual-fee Arrival card: This card is arguably still worth getting and keeping if you’re a big travel and dining spender.
Here are a few things to think about:
- The perk that once made this card a slam-dunk among that no-annual-fee set – the 10 percent redemption bonus – is getting halved. This means that other no-AF cards on the market might now be stronger competitors. The Citi Double Cash, for example, gives you 1 percent back on spending and another 1 percent when you pay it off.
The Double Cash card, however, hasn’t had a history of generous sign-up bonuses. Therefore, the Arrival may still be a good choice if you collect the sign-up bonus and then use the card on dining and travel only. But now that the Arrival’s redemption bonus is lessened, you might ask yourself if a mere 0.5 percent edge on travel and dining is worth keeping the card in the long term – or if you’d be better served by consolidating all your spending into the Double Cash eventually.
2. Rewards are getting harder to redeem. You have to have a minimum of 10,000 miles ($100).
- Rewards are getting harder to redeem. You have to have a minimum of 10,000 miles ($100). That’s high, compared to other cards’ minimum redemption amounts. One of the advantages this card had over other travel cards was the fact that it provided quick wins – you could redeem for a $25 cab ride or baggage fee. The increased redemption threshold, therefore, is bad news for low spenders – and those using the Arrival as part of a multi-card rewards strategy.
- The card may be less attractive to families. Inclusion of “tourist attractions” in the travel category made the card a good fit for families who may not have flown, but who dropped a lot of money on Disney or Six Flags tickets. Those expenditures, in addition to other family vacation staples like museums, will no longer be up for travel redemptions.
Bottom line: Caveats aside, this card offers 2X miles on dining and travel. If these categories represent big outlays for you, it could still be a valuable player in your wallet. Even if it gets fewer swipes going forward, with no annual fee, you don’t have to worry as much about a diluted redemption bonus and longer waits between redemptions.
$89-per-year Arrival Plus card: The annual fee on this card just got harder to justify. Look at those three points above and remind yourself that you not only have to put up with them, but you have to pay $89 a year. With the reduced redemption bonus, this card basically amounts to a 2 percent back card in a world where the no-annual-fee Citi Double Cash and the Capital One Venture (which gives 2X miles on all purchases for a $59 annual fee) exist.
Other cards in the same annual-fee ballpark justify their fees with perks that add value. Airline cards, for example, throw in waived baggage fees. Hotel cards often throw in an anniversary stay. The Chase Sapphire Preferred lets you boost your points’ value by letting you transfer them directly into airline programs. Other travel cards give yearly statement credits that can be used toward travel.
Bottom line: The only upgrade among the changes is the redemption bonus on cash back and gift cards – but this is hardly a consolation to shrewd rewards-chasers, who would never use the card for cash back anyway, given the poor redemption value.
Cards change their benefits all the time, and some have recently raised their annual fees. However, those increased fees often accompany new benefits. While the Arrival Plus’s annual fee hasn’t budged, its benefits have slipped. Most of the changes seem to save the issuer money, but don’t add any value for cardholders, making this all feel like a clear-cut devaluation.