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Quit Stockpiling Your Credit Card Rewards

Monday, August 26, 2013 - 11:50 AM
From Market Watch:
Never trust rewards programs. The promises they make can be taken back at any time, as one recent incident reveals.

The customers of Boston-based startup PerkStreet Financial were left empty-handed last week when the company announced it is shutting down operations effective Sept. 26 — and discontinuing its perks program immediately.

[...] Rewards programs aren’t likely to give you a heads up on any upcoming changes. That would create a run on the bank for redemptions. And since only a third of all rewards are typically cashed in, according to loyalty marketing firm Colloquy, we could end up hearing a lot of CEO mea culpas with “we don’t have the funds.” And besides, they’re not guaranteed anyway.

Read more

Another popular credit card rewards program (associated with PenFed's VISA and AmEx credit cards) devalued its redemption ratio, making it more expensive to redeem for certain popular options. 

The article includes a timely reminder that reward program balances are not savings accounts and  offers good tips for making the most of your credit card reward programs. 
pearlbrownpearlbrown1,474 posts since
Nov 2, 2010
Rep Points: 6,407
1. Monday, August 26, 2013 - 7:33 PM
Golden rule:

"That’s why if you sign up for loyalty programs with generous rewards, you should probably use them and use them quickly."

Even with all these negative examples, there are good reward programs that can earn us several hundred dollars a month with just a little effort.  Just remember: cash is king in this arena.
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
2. Monday, August 26, 2013 - 9:44 PM
We have thousands of points on our Universal Credit Card which I have never used because you have to spend chunks of money to just get a discount on something.  It is all about spending.  They can't be cashed in in any way so they are useless to us.  I can go out to get for $50.00 and get $5.00 off using my reward points.  Big deal!  I would rather go to McDonalds for eat for $8.00 for two people  and not bother with rewards.  I use the card and pay it off each month but these type of rewards are not useful to us.  I don't want what their vendors are selling.
paoli2paoli21,401 posts since
Aug 10, 2011
Rep Points: 6,135