US Bank Downgrading Restaurants on Cash + to 2%

Discuss the Visa & MasterCard payment networks as well as cards that operate through them.
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PlyrStar93
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Postby PlyrStar93 » Fri Oct 17, 2014 11:50 pm

Okay, that would make sense since people tend to spend a lot on eating. That's just the same thought as how Citi cuts down 5x points on restaurants for Forward.

Freedom + Discover, if the next year's rotating categories could be the same as this year, we still have 50% throughout the year to get 5% on dining.

So is this year a decline of the entire credit card industry? I have seen Chase cut annual dividends on Freedom and CSP, AMEX PRG losing 15k bonus points, and almost everyone has raised the late fees, not to mention Citi discontinues Dividend and, this most recent, USBank change.
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
Chase Freedom Visa Signature $7000 6/2014 | Citi ThankYou Premier Visa Signature $5000 1/2015
All EMV.

jeffysdad01
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Postby jeffysdad01 » Sun Nov 02, 2014 8:59 am

I got this card by applying online as soon as it became available (found out about it here) and have used it exclusively for restaurants/fast food ever since. Of course I'm disappointed about the change, but I still think it has value for department and furniture stores. I almost never shop at these, but someday I'll need a new couch or something, or a couple of new suits for work. These kinds of items can add up to a year's worth of restaurant spending for me now that I've cut back on eating out.

I really wish US Bank or someone would provide a card that gives more than 2% for veterinarian/pet store spending. That's my second-biggest spending category after groceries.

whit
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Postby whit » Sun Nov 02, 2014 11:31 am

PlyrStar93 wrote:So is this year a decline of the entire credit card industry? I have seen Chase cut annual dividends on Freedom and CSP, AMEX PRG losing 15k bonus points, and almost everyone has raised the late fees, not to mention Citi discontinues Dividend and, this most recent, USBank change.


what you see is the aftermath and effects of what happens when hackers get into payment system (which, btw, I think I read somewhere someone commenting on why it is so difficult of a transition in terms of working here when it's been around for ages elsewhere) that has a few components to it (which is why emv can't take like a duck to water when you think about the terminal and the POS point of sale system and how the two talks to each other in conjunction with the software the merchant uses to process)

That that caused the lawmakers to crack down
Which causes companies to take on this overhaul that is a bit out of the left field tbh

So now you see a rework or redo of their credit card systems to accommodate that

Just like frankdodd made it so debit cards with cashback/rewards a thing of the past

wiivile
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Postby wiivile » Mon Nov 03, 2014 11:34 am

PlyrStar93 wrote:Okay, that would make sense since people tend to spend a lot on eating. That's just the same thought as how Citi cuts down 5x points on restaurants for Forward.

Freedom + Discover, if the next year's rotating categories could be the same as this year, we still have 50% throughout the year to get 5% on dining.

So is this year a decline of the entire credit card industry? I have seen Chase cut annual dividends on Freedom and CSP, AMEX PRG losing 15k bonus points, and almost everyone has raised the late fees, not to mention Citi discontinues Dividend and, this most recent, USBank change.


What happens when Discover + Freedom's restaurant quarter is the same? :)

I really want a restaurant card, and the Cash+ was supposed to be that. Now it's a paperweight (not really, it can't even hold down paper).
    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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PlyrStar93
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Postby PlyrStar93 » Mon Nov 03, 2014 12:20 pm

whit wrote:what you see is the aftermath and effects of what happens when hackers get into payment system (which, btw, I think I read somewhere someone commenting on why it is so difficult of a transition in terms of working here when it's been around for ages elsewhere) that has a few components to it (which is why emv can't take like a duck to water when you think about the terminal and the POS point of sale system and how the two talks to each other in conjunction with the software the merchant uses to process)

That that caused the lawmakers to crack down
Which causes companies to take on this overhaul that is a bit out of the left field tbh

So now you see a rework or redo of their credit card systems to accommodate that

Just like frankdodd made it so debit cards with cashback/rewards a thing of the past

That's actually a very good point.

What I thought about nerfing was always about consumer and economy, like increasing bad debts (though I don't know about the situation). What I thought about data breach was consumer's personal information and why merchants still don't implement EMV and so on, but neglected the losses for financial institutions.

As the payment system breaches becoming prominent these days, banks may have already paid for much more than what they expected. That should be a solid explanation to cutting down rewards as a form of their expense. This is something new I never thought about.

wiivile wrote:What happens when Discover + Freedom's restaurant quarter is the same? :)

That would be something nobody expects. :)
Just like this year's calendar which is already some kind of tricks maybe:
  • Discover has Home Improvement Stores on Q2 while Freedom is the same (though only Lowe's).
  • Discover has Online Shopping and Department Stores on Q4 while Freedom is pretty much identical with fewer merchant selections.
  • not to mention the gas season on Q3, but at least Freedom also had Q1.
Not sure about past years as I have only got into these since this year. But as what we already see now, there has been much overlap between these two. Probably next time when the two negotiate and they both put restaurants in the same quarter - just hopefully they don't.

Just my personal arrangement if Freedom and Discover have something same in the same quarter - I take priority for Freedom. Keep the potential to have the points transferred to other programs so it would worth more, but if I eventually don't do that I still have at least 1% (or 5% based on categories) earning. I nearly sockdrawered Discover on Q3, though I carry it with my Forward this quarter.
Citi Forward Visa $5000 10/2012 | American Express Blue Cash Everyday $8000 2/2014 | Discover it $7000 5/2014
Chase Freedom Visa Signature $7000 6/2014 | Citi ThankYou Premier Visa Signature $5000 1/2015
All EMV.

wiivile
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Postby wiivile » Mon Nov 03, 2014 2:19 pm

PlyrStar93 wrote:I nearly sockdrawered Discover on Q3, though I carry it with my Forward this quarter.


Can I have your Forward? Thanks.

Why does the Forward still exist? Why has Citi not nerfed it?
    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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otter
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Postby otter » Mon Nov 03, 2014 4:20 pm

US Bank's New Logo:

Image
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450

yfan
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Postby yfan » Mon Nov 03, 2014 5:00 pm

whit wrote:what you see is the aftermath and effects of what happens when hackers get into payment system (which, btw, I think I read somewhere someone commenting on why it is so difficult of a transition in terms of working here when it's been around for ages elsewhere) that has a few components to it (which is why emv can't take like a duck to water when you think about the terminal and the POS point of sale system and how the two talks to each other in conjunction with the software the merchant uses to process)

That that caused the lawmakers to crack down
Which causes companies to take on this overhaul that is a bit out of the left field tbh

So now you see a rework or redo of their credit card systems to accommodate that

Just like frankdodd made it so debit cards with cashback/rewards a thing of the past

I can name more than one bank with rewards debit cards. Discover Cashback checking (10 cents on every swipe, check, bill payment), and Bank of America debit cards - which are eligible for BankAmeriDeals cashback, which offer 10% or more cashback on specific purchases.

As much as there is cost of fraud, the changes to the rewards programs are due neither to the cost of fraud nor regulation. It's a result of the programs not making enough money. Banks are getting really good at detecting fraud and shutting down cards (and issuing new ones) before major damage. But the rewards program competition has caused too many people to get rewards cards just for the bonus, or the bonus categories (at least, more than the banks anticipated), and not use the cards otherwise. That means they have the loss leaders (sign up bonuses and bonus categories) but less of the benefit of having that card become the default card for the consumer. That's why we're seeing rewards nerfed.


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otter
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Postby otter » Mon Nov 03, 2014 5:19 pm

yfan wrote:I can name more than one bank with rewards debit cards. Discover Cashback checking (10 cents on every swipe, check, bill payment), and Bank of America debit cards - which are eligible for BankAmeriDeals cashback, which offer 10% or more cashback on specific purchases.

As much as there is cost of fraud, the changes to the rewards programs are due neither to the cost of fraud nor regulation. It's a result of the programs not making enough money. Banks are getting really good at detecting fraud and shutting down cards (and issuing new ones) before major damage. But the rewards program competition has caused too many people to get rewards cards just for the bonus, or the bonus categories (at least, more than the banks anticipated), and not use the cards otherwise. That means they have the loss leaders (sign up bonuses and bonus categories) but less of the benefit of having that card become the default card for the consumer. That's why we're seeing rewards nerfed.


I actually tried to open a checking account with Discover and was told they'd need to verify I was who I said I was (duh, I applied from a link they sent to my e-mail, the same e-mail addy I've had the whole time I've had my Discover It card. As for the BoA BankAmeriDeals, I used to use it, but the deals aren't nearly as good as they used to be.

I think a lot of the nerfing is because too many people are getting smart.The cards which have the highest credit criteria are the ones likely to get nerfed (PenFed, CSP, US Bank Cash+) simply because those with the best credit simply don't carry a balance and so the issuers don't get the desired interest which is their expected bread and butter. The "break even" for CC's seems to be 2% so without substantial interest income, a card issuer is losing money when they give an initial bonus and/or 2%+ rewards and the cardholder just gets his bonus, pays off the card and uses the card only for the targeted categories. Ironically, cards with a little lower credit customer (good to excellent credit) seem to be less likely to be nerfed. The Chase Freedom and Discover It are examples of those... people with those cards have a little lower average credit so enough of them have a recurring balance and from what I've seen where I work, people will use those cards even when it's not for 5% categories. The credit savvy customer gets the Freedom and IT, but so does the average Joe.
In my Wallet:
  • Amex PRG NPSL[3-14, bd 91]
  • Sallie Mae MC $8000[1-14]
  • Chase Freedom $4700[1-14]
  • Discover It $2750[8-13]
  • BoA UCF Alumni Cash Rewards $5000 [3-15]
Sometimes in my Wallet:
  • GM BuyPower WEMC $5000[9-14]
  • Wells Fargo Propel 365 Amex $7000[4-14]
  • Barclaycard Arrival WEMC $7000[3-14]
  • BoA Better Balance $3000[2-15]
In my sockdrawer: Amex BCE $1000[10-13, bd 91], OCCU Duck $10000 [11-13], The Sportsman's Guide Visa $8000[8-14], Chase Slate $4000 [9-14]Delta Gold Amex $2000 [2-15 bd 91], Diners Club MC $20000 [10-14] Commerce Bank Visa $2000 [3-15] Citi Double Cash $1000 [3-15]
Total CL: $90450


yfan
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Postby yfan » Mon Nov 03, 2014 5:35 pm

otter wrote:I actually tried to open a checking account with Discover and was told they'd need to verify I was who I said I was (duh, I applied from a link they sent to my e-mail, the same e-mail addy I've had the whole time I've had my Discover It card.

This is standard procedure though. It asked me as well, and I did, and it worked just fine. There was no additional inquiries either, I think because Discover did the verification from my credit reports they already SP to provide me with my FICO score.
The credit savvy customer gets the Freedom and IT, but so does the average Joe.

I think there you have it, right here.


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