Coping with Nerfed Rewards & keeping up AAoA

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wiivile
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Coping with Nerfed Rewards & keeping up AAoA

Postby wiivile » Thu Oct 23, 2014 8:29 am

This is a semi-rant, semi-question...

Last week, U.S. Bank announced another nerf of the Cash+ card: restaurants will no longer be a 5% category starting on January 1, 2015 - it will be reduced to a 2% category. As such, my go-to restaurants card is now no more rewarding than my CSP, so I will have to sock-drawer it.

I don't like sock drawering cards, especially ones I've just applied for less than a year ago, because it means I've taken a hit on my AAoA and inquiries but have to keep the card open in order to maintain the credit line (unless I want to open ANOTHER card to replace the credit line, taking another hit in the AAoA and inquiries dept).

I'm finding that credit card companies are continuously nerfing rewards and making cards less and less lucrative. Because of this, I'm hesitant to apply for new cards because I don't want to damage my AAoA. (Inquiries I'm less concerned about because they're only temporary). For example, I want to apply for the Citi Double Cash, but I'm sure it will be nerfed because 2% on everything with no annual fee and no cap just seems too good to be true for me (even though the Fidelity card already exists, it requires a Fidelity account which is a small 'catch').

I only have 3 credit cards total (open or closed), and I've seen so much more of you with so many more cards. Still, I don't want to be opening more cards just to jump at tempting rewards. How do you keep your AAoA up with so many cards?
    Chase Sapphire Preferred Visa Signature: 11/2013, $15,000 CL
    Chase Freedom Visa: 11/2009, $4,700 CL
    U.S. Bank Cash+ Visa Signature: 11/2013, $11,200 CL


takeshi
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Postby takeshi » Thu Oct 23, 2014 8:31 am

wiivile wrote:How do you keep your AAoA up with so many cards?

Backdating.

Though that really won't help you right now or in the near future. It works for me because I established membership in 1998.

wiivile wrote:I'm finding that credit card companies are continuously nerfing rewards and making cards less and less lucrative. Because of this, I'm hesitant to apply for new cards because I don't want to damage my AAoA. (Inquiries I'm less concerned about because they're only temporary).

Your AAoA is impacted by opening a new account whether or not rewards are nerfed. I understand your concern about the cost/benefit of rewards/nerfing but the reality is just that creditors are businesses and make business decisions in their favor and to satisfy shareholders. You have to jump in the pool at some point and just get over your fear. Things are going to change and you're going to have to make decisions and change course in future.

If you really want to avoid all this then the best course of action may be just to avoid rewards programs entirely. You have to be willing to play the game (and deal with its issues) if you want to be in the game.

wiivile
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Postby wiivile » Thu Oct 23, 2014 8:33 am

takeshi wrote:Backdating.

Though that really won't help you right now or in the near future. It works for me because I established membership in 1998.


Isn't that only for AMEX?
    Chase Sapphire Preferred Visa Signature: 11/2013, $15,000 CL
    Chase Freedom Visa: 11/2009, $4,700 CL
    U.S. Bank Cash+ Visa Signature: 11/2013, $11,200 CL

hockeyplayr
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Postby hockeyplayr » Thu Oct 23, 2014 9:22 am

wiivile wrote:Isn't that only for AMEX?


yes

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Credit Scores: Equifax - 736 (October Fico) | Experian 726 (October Fico) | TU - 758 (October Fico)

Credit Lines: Diners Club 20k | Citi DC 9.1k | SDFCU 5k | Penfed 7k | Amex BCE - 10.5k | Chase Marriot - 5.2k | CSP - 6.5k |Discover IT - 9k | Sallie Mae 3.8k | Citi TYP - 3.5k | BOA 123 - 4.9k | Total Rewards 3.25k|

wiivile
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Postby wiivile » Thu Oct 23, 2014 9:32 am

Assuming I dislike AMEX (which I do, because I travel internationally and it's useless a lot of places), how else should I handle this AAoA thing?
    Chase Sapphire Preferred Visa Signature: 11/2013, $15,000 CL
    Chase Freedom Visa: 11/2009, $4,700 CL
    U.S. Bank Cash+ Visa Signature: 11/2013, $11,200 CL

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CarefulBuilder14
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Postby CarefulBuilder14 » Thu Oct 23, 2014 12:59 pm

In your shoes, I'd pick Cash+ categories that were a bit unusual but occasionally useful - like electronics or sporting goods stores. Use the CSP for dining and travel.

Apart from your chosen bonus categories, I'd only make the occasional small purchase with the Cash+ to keep it active.

There are no-AF Amex cards you might consider. What about BCE? Or do you want to keep your number of cards and issuers to a minimum?

Maybe get a Discover or MC? If you travel a lot, you might find some places that take MC but not Visa. I really like having a card from each major network.

As far as AAoA, having even just one account (presumably with a clean history) with Chase from 2009 will help you when you talk to a human if you ever have to recon a credit decision.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

TheSwarm
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Postby TheSwarm » Thu Oct 23, 2014 3:02 pm

Maybe go Arrival+ so you can at least get 2% on everything. I doubt those rewards will get nerfed on a card with an annual fee. Good internationally too.

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CarefulBuilder14
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Postby CarefulBuilder14 » Thu Oct 23, 2014 5:27 pm

TheSwarm wrote:Maybe go Arrival+ so you can at least get 2% on everything. I doubt those rewards will get nerfed on a card with an annual fee. Good internationally too.


CSP lost the 7% dividend. Many AF Amexes had roadside assistance benefits trimmed.

I wouldn't be shocked if the Arrival+ 10% 'point refund' on travel credits got cancelled.
Warranties and sketchy merchants: Schwab Platinum
Price rewind: Costco
Travel insurance: Prestige, CSP
Perks: IHG, Hyatt
Rewards/Offers: Discover, Freedom, ED, BCE
Taxes/Misc: SPG

Limited value, might close: Arrival

Might add: First Tech, proper business card

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Vattené
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Postby Vattené » Thu Oct 23, 2014 8:40 pm

As takeshi pointed out there really isn't much you can do about your AAoA. Rewards programs are going to change over time, often for the worse. It just comes with the territory, but earning even just 1% on all the spending you would be making anyway still makes the rewards game well worth it.

Maybe you should focus on cash back cards. The returns may change over time but what you earn is solid because it is in the form of cash and not points or miles, whose valuations can always go down. Or, since you travel a lot, perhaps a versatile travel card is best suited for you. Something like a CSP or Arrival+ can always get nerfed, but the rewards programs aren't tied to one airline/hotel/etc.

If you do find yourself in that situation it may be possible to PC to another card from that issuer. It is a difficult topic to navigate, just because there is no way to anticipate what will get cut. I must say, though, that the only reason I am not applying for the Citi Double Cash myself is because 2% back on everything sounds too good to be true and I have no confidence that it would last long-term.
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My Cards: Barclay Arrival+ | Discover it | Amex ED
AU:: Discover Miles | BofA BBR | Barclay Commence (SD'd)

TheSwarm
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Postby TheSwarm » Fri Oct 24, 2014 1:55 pm

CarefulBuilder14 wrote:CSP lost the 7% dividend. Many AF Amexes had roadside assistance benefits trimmed.

I wouldn't be shocked if the Arrival+ 10% 'point refund' on travel credits got cancelled.


CSP was not as simple as the Arrival+. The only thing the Arrival+ has on the Double Cash is the 10% back on points redeemed for an $89 annual fee.

There is no way it will get nerfed. If it did, I think there would be no reason for anyone to have it. I'd just deal with a Chip+Sig card.



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