The what you think will happen this year (2016) thread

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Tubpbs
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Re: The what you think will happen this year (2016) thread

Postby Tubpbs » Tue Jan 19, 2016 3:49 pm

Vattené wrote:One thing in Citi's favor in the sustainability of the Double Cash is offering no introductory bonus. The people that sign up for it are necessarily more interested in the long term value. I'm still not convinced it will stay around too terribly long (I don't have one myself), but I completely understand everyone that has signed on to get value from it for however long it lasts. Even if it is doomed to last forever, it's a new offering so it will probably stick around a few years.


I think Citi probably makes good money on this card. It's been well over a year and I still see ads almost every day for it on tv. I think you'd be surprise what portion of people carry a balance almost all the time. They see and use CCs differently than the people on these sites.

We'll see, but I'd wager they're making money on it. 2% is very different from 5%.
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Vattené
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Re: The what you think will happen this year (2016) thread

Postby Vattené » Tue Jan 19, 2016 4:30 pm

Oh I agree and I'm sure I would be shocked. It's beyond me, but a lot of people do it. If it was actually costing them money I'd bet it would be gone already. 5% category cards are much easier for rewards seekers to abuse, which may make them more prone to getting cut. The general public can use it for just about everything and bring the company's effective payout of rewards much lower than 5% (and likely lower than 2%). On a Double Cash everyone get the same effective rewards rate regardless of what they spend on or what other cards they have. It doesn't fix the expenses by any means, but it makes them more consistent. With swipe fees around 3% or so, that leaves little margin for Citi. As you pointed out, though, credit card interest is very profitable and there's just no way for us to know how much that and other sources of revenue adds to the equation for this one product.
-Vattené
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AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

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Re: The what you think will happen this year (2016) thread

Postby JonE » Sat Jan 23, 2016 8:03 pm

4ktvs wrote:
kdm31091 wrote:
CarefulBuilder14 wrote:Let's see how long they can last when they treat their unprofitable customers that way! :ppp

The SM signup bonus is small, but they can't support the rewards program by buying a lot of cheap hotel/airline/cruise points from the co-brand partners. Cash rewards cost more.


Exactly. 5% on up to $250 in each category, while not being "a lot of money" in real terms, becomes significant when they have to pay it out to a bunch of cardholders - it's cold hard cash, not points or miles. So I am not even slightly surprised that it was closed to new apps.

I'm waiting for the day existing users are converted to something else (because inevitably it's going to happen eventually). All hell will break loose.


I really wanted the card, but I had this feeling that such a card wouldn't last. Then they took it down from the main page but a direct link still worked. I knew then it was going out the door. I didn't apply as I didn't want to waste a HP on something that might not even be there the next year.

I am just kind of shocked that such a product existed in the first place. MF will really blow up when they kill this card for existing users, I would hope they get a choice as to what they PC to but from what I understand that isn't how that normally works. That or they just kill the rewards and don't convert them to anything.


Yep, can't wait to read THAT thread. :rant:
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Re: The what you think will happen this year (2016) thread

Postby JonE » Sat Jan 23, 2016 8:10 pm

You will probably see a lot more in the way of reduced reward cards much like the new Barclays card that replaced SM. Not much better terms than what Cap One QS offers. I think you could see Citi Double cash probably become UP TO 2% on certain spending, nothing I have seen really supports that hypothesis other than the actions of other cards. The conspiracy-theorist in me thinks this Double Cash Back offering from Discover is a front for some major change to the reward programs after all is said and done.

One wonders if this is the year you'll see Chase institute the 5/24 rule on co-branded cards. Of course, they would need some consent from their partners wouldn't they?

There will be (and I dare say already is) a wider gap between the beginning starter cards and the overall luxury cards that not anyone can get. You'll see that continue.

Maybe this is the year the MyFicoers wise up and quit applying for cards they don't need?.........NAH!
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Re: The what you think will happen this year (2016) thread

Postby Nixon » Sat Jan 23, 2016 8:28 pm

JonE wrote:You will probably see a lot more in the way of reduced reward cards much like the new Barclays card that replaced SM. Not much better terms than what Cap One QS offers. I think you could see Citi Double cash probably become UP TO 2% on certain spending, nothing I have seen really supports that hypothesis other than the actions of other cards. The conspiracy-theorist in me thinks this Double Cash Back offering from Discover is a front for some major change to the reward programs after all is said and done.

One wonders if this is the year you'll see Chase institute the 5/24 rule on co-branded cards. Of course, they would need some consent from their partners wouldn't they?

There will be (and I dare say already is) a wider gap between the beginning starter cards and the overall luxury cards that not anyone can get. You'll see that continue.

Maybe this is the year the MyFicoers wise up and quit applying for cards they don't need?.........NAH!


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kdm31091
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Re: The what you think will happen this year (2016) thread

Postby kdm31091 » Sat Jan 23, 2016 9:13 pm

JonE wrote:The conspiracy-theorist in me thinks this Double Cash Back offering from Discover is a front for some major change to the reward programs after all is said and done.


You raise a good point. It's possible. It reminds me of at the store I work at. Items often go on sale at the exact same time that the regular price increases permanently. So it's on sale to get you to buy it now and maybe not notice that the standard price has increased later. Same kind of idea: Discover does this great promo and later announces that they will no longer do 5% rotating, but maybe 2-3%. I hope not, but I see your point/theory!

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Re: The what you think will happen this year (2016) thread

Postby CarefulBuilder14 » Sat Jan 23, 2016 9:31 pm

kdm31091 wrote:
JonE wrote:The conspiracy-theorist in me thinks this Double Cash Back offering from Discover is a front for some major change to the reward programs after all is said and done.


You raise a good point. It's possible. It reminds me of at the store I work at. Items often go on sale at the exact same time that the regular price increases permanently. So it's on sale to get you to buy it now and maybe not notice that the standard price has increased later. Same kind of idea: Discover does this great promo and later announces that they will no longer do 5% rotating, but maybe 2-3%. I hope not, but I see your point/theory!

Well, there were some travel insurance perks that were nerfed over the summer.

Ultimately, though, the IT card is such a big part of Discover's overall business that I think they will be careful to not nerf it too much. They're pretty good about trying to keep existing customers. I think they may just offer less-than-useful 5% categories.
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Re: The what you think will happen this year (2016) thread

Postby 4ktvs » Sun Jan 24, 2016 10:19 pm

It seems like Discover wants more sub prime customers by allowing people to app online for there secured product with out hoping for a counter offer after trying to get a unsecured product.

Maybe with interest rates on the rise banks now are more interested in gaining sub prime customers who are more likely to pay interest on there cards.

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CarefulBuilder14
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Re: The what you think will happen this year (2016) thread

Postby CarefulBuilder14 » Sun Jan 24, 2016 11:48 pm

4ktvs wrote:It seems like Discover wants more sub prime customers by allowing people to app online for there secured product with out hoping for a counter offer after trying to get a unsecured product.

Maybe with interest rates on the rise banks now are more interested in gaining sub prime customers who are more likely to pay interest on there cards.

It's not purely for subprime customers. Discover was previously very uneasy with thin-file applicants.
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Might add: Proper business card, CSR, Ritz, Delta Gold, First Tech, BofA Travel PH, Aviator Red

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Re: The what you think will happen this year (2016) thread

Postby kdm31091 » Mon Jan 25, 2016 7:33 am

CarefulBuilder14 wrote:
4ktvs wrote:It seems like Discover wants more sub prime customers by allowing people to app online for there secured product with out hoping for a counter offer after trying to get a unsecured product.

Maybe with interest rates on the rise banks now are more interested in gaining sub prime customers who are more likely to pay interest on there cards.

It's not purely for subprime customers. Discover was previously very uneasy with thin-file applicants.


Discover is definitely conservative. There are people on MF who have many cards and can't get Discover to save their lives, or they got a Discover with a tiny limit so they bash Discover whenever they get a chance.



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