I suspect there's merit to these hypotheses (as well as insight into broader business attitudes), but I also wonder how many consumers are even that serious about rewards. Many may sign up for the bonuses and because the rewards sound great, but not follow through or pay enough attention to properly utilize them. I feel like our world is pretty small. Credit card companies have us transactors for the swipe fees, but they also have a lot of customers that just want something to give them the illusion of prestige. There are also a lot of consumers that carry balances because credit line = money that's available to me (AKA the cash cows to the credit card issuers).
It might be an effective strategy because all they need to do is say, "Hey! Look at this shiny new introductory bonus!!"
and people will jump at it. How many posts does this forum get to the effect of, "I just got approved for the Amex Plat...what are these 'Membership Rewards points' I keep hearing about?"
Brad Bishop wrote:I first noticed this in the 1990s with the long distance companies competing. AT&T, and other companies, would pay you $100 flat out to have them as your long distance company. They would even offer you competitive rates. This was all only if you weren't with AT&T. So, if you were with AT&T and said, "I want a $100 check. I want better rates," they'd tell you, "No - that offer is only for new customers." It was in your best interest to leave AT&T, because of these bizarre business practices, and come back 6mo-1yr later and have them to pay, both in the check and advertising, to win you back.
DirecTV does this. SiriusXM does it. The cable companies mostly seem to do it but if you just call up and ask for the latest discount after paying a month at the normal price.
My parents live out in the country where DirecTV and Dish are the only options for television providers, and both are awful about this. They've just resorted to more or less flipping back and forth between the two every couple of years because of what they'll offer new customers (even though they've been customers in the recent past). They're always running promotions for new customers and are perfectly content in screwing over anyone that's been with them for a few months.