CLEAR: Get Through Airport Security Even Faster

Everyone has recurring nightmares. For some, it’s about showing up to work/class/wherever naked. For others, it’s being forced to give a big speech. And, of course, there’s the “It’s time to take the final and I haven’t shown up for class” dream. And then, there are those who travel frequently. Their nightmares? Showing up at security, only to find out that PreCheck is closed.*

Given the government shutdown, that nightmare may become reality more frequently. We saw it first-hand at Baltimore on Sunday, with massive security lines and PreCheck shut down. Under those circumstances, those with Pre don’t have to take their shoes off, but they still have to wait in line.

It took me about 30 seconds to decide to sign up for CLEAR (and only five minutes  to complete the process). Goodbye, 30 minute line. You’ll need to sign up at an airport, but you can start the paperwork online. Everyone involved in the process was friendly and helpful, not something that you say about the airport too often.

CLEAR: Even faster Than PreCheck

Most people know about PreCheck, the TSA-operated security program that allows you to skip the main line. They do a background check on you, an interview and then you’re all set. It has a fee, but many credit cards will take care of it for you. Pre has a few downsides, though. The lines still get backed up at busy times, and it’s possible that you could be randomly selected to go through the regular lines, anyway.

CLEAR handles the identification part of the process for you (at participating airports). Instead of waiting in line to see the TSO at a podium, you go to a CLEAR kiosk. A representative will ID you by scanning your fingerprints and retina. Then, they walk you right to the podium. They’ll tell the TSO that you’ve been IDed, and you’ll be good to go. By avoiding the formal ID check, you’ll skip the longest part of the line. Remember the days of showing up at the airport 15 minutes before boarding? CLEAR brings you one step closer.

The Downsides To CLEAR

CLEAR

Open at 24 airports, as well as a few other random locations

Nothing’s perfect, including CLEAR. Here are a few issues you might face:

  • At this time, CLEAR is only available at 24 airports. It’s growing fast, but your home airport may not be there. If not, it’s only worth it if you travel frequently to one that (or if it’s free).
  • Naturally, it’s not free. List price is $179, but there’s no way that you should have to pay that. Delta SkyMiles members pay $99, while most elite members pay $79. Those with top-tier Diamond status get it for free. If you have Diamond status, there’s no reason not to get it. You can add adult family members for $50 each. Kids under 18 are free and don’t need a CLEAR account.
CLEAR

Nobody pays list price

  • CLEAR only gets you past the ID check. After they walk you past the podium, regular security procedures apply. That means that if you don’t have TSA PreCheck, you might still have to take off your shoes, use the full X-Ray machine, etc.

There’s no question that security has become a “class-system.” The more you pay, the faster you go. Whether it should be this way is a question for another column. Fair or not, though, it is how it is. Getting CLEAR membership will help you scoot through security a bit faster.

 


*I’m a “It’s time to take the final and I haven’t shown up for class” kinda guy.

 

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Weekend News From The World Of Travel

Another exciting weekend, as the government shutdown continues to hit airports and football fans begin booking flights to Atlanta. And if you want to spend some time in Canada, here’s a United flight for you…

TSA Absenteeism Reaching 10%

The TSA issued a report that said that absenteeism reached 10% yesterday. That compares to 3.1% a year ago. Notably, many called in because they didn’t have the resources to get to work. It’s not exactly a high-paying position, and a not insignificant number of employees don’t have the finances to go this long without a paycheck.

The only plus side is that I’ve never seen passengers and TSOs treat each other better. Even at 5:30 on a Saturday morning, people were friendly to each other, with many of the passengers wishing TSOs well over what looks to be a protracted shut-down. Lines were definitely moving a little more slowly, but they were moving. I consider that a win.

Boarding today at Baltimore, the pre-check line was closed, meaning that you had to go through the regular line if you didn’t have the alternative (which I’ll write about in the next day or two, but is called “Clear”).

The TSA as an organization, though, is beginning to feel the effects of the culture that they have created. It was never known as a great place to work, and I wouldn’t blame employees in the slightest for quitting their jobs to do something that actually paid them. Management has no goodwill to fall back on.

Superbowl Flights

In the annual Superbowl flight update, LA fans hold the advantage. While flights from both Boston and LA can be had for about $350 with one stop, the $680 you’ll pay from Boston for a non-stop exceeds the $530 that it will cost you from LAX. It’s perfectly understandable, though, that Rams fans will pay less. Is it really worth $500 to fly across the country and see your team lose?

United Passengers Visit Canada

Another reason to make sure to bring extra snacks on your flight. A few days ago, a flight from Newark to Hong Kong was diverted to Goose Bay, Canada when a passenger faced a medical emergency. And then the plane broke. Passengers faced a 14-hour delay on the tarmac, as there were no immigration officials to process them. The plane sat on the tarmac, as temperatures dropped below zero. Apparently, though, passengers and crew managed to stay sane. Reports from the passengers regarding the crew seem to be excellent.

Fortunately, the next day, the passengers were treated to Timbits and coffee, and eventually got into the airport, making them the first people ever who wanted to hang out at the gate.

This isn’t the first time that the region has come through for stranded passengers. Read a bit about Operation Yellow Ribbon to see an example of some heroic Canadian friends.

 

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Hotel Updates: Radisson, Marriott

Radisson Rewards (Formerly Club Carlson)

Radisson Rewards

Stay 30 nights to max out the promotion

You know the hotel business is doing well when even the good rewards programs have lousy promotions. Sigh. Welcome to the jungle, Radisson Rewards. This is a loyalty plan that I once referred to as the little program that could, given their generous bonuses and inexpensive prices. Not this quarter, though. Radisson is bringing back a prior promotion based on the nights you stay in the quarter. It’s one that we’ve seen before, and not their best. You’ll receive a bonus based on how many nights you stay between now and the end of March. The problem is, unless you’re going to be staying there a ton of nights, there’s not much to earn. You won’t even earn enough for a free night until you’ve stayed five nights in the promo period. Even at the high end, the 120,000 points is not great. There’s no reason not to sign up, since it’s free, but there’s no reason to go out of your way for Radisson Rewards this quarter, either.

Marriott’s New Bonvoy

Welcome to the new Marriott Rewards. We don’t know too much about it for now, except the name, but the rest of the details will be announced in February.

There’s a problem, though: the name. I don’t know how much they paid a consultant to come up with that ridiculous name, but I gladly would have done a better job at half the price. I assume that they were going for “bon voyage,” but they ended up with something that sounds like a rash that you get from too much time in the jungle. Seriously, which of these sentences sounds more natural:

“Welcome to Bonvoy, the new Marriott loyalty program,” or…

“Doctor, can you take a look at my arm? I think I’ve got a Bonvoy?”

Yeah, I thought so.

Added Bonus: The Marvelous Mrs. Maisel struck me as one of those “critics’ darling” shows that won all kinds of awards, but which nobody ever watched. Well, if you’re part of that nobody crowd, it’s time to find a new crowd. Fantastic show, well-acted and Tony Shalhoub plays a character that you could see easily fitting in in “Monk.” Feel free to do it while staying at a hotel, regardless of how ridiculous its loyalty program name is.

 

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Airport Security: Government Shutdown Edition

I’ve always thought that it would be fun to be the person at Disney World who is responsible for figuring out the logistics to keep the lines as short as possible. It seems very satisfying to knock off a minute or two before Mickey. This week, it looks like airports may need to borrow some of those people.

TSA Calling in Sick

TSA

Cutting back on massage times. Book early. Photo Credit: Creative Commons

I’m not the world’s biggest TSA fan, but I do feel bad for these guys. TSOs are viewed as essential personnel, so they have to work, even for free.* Thus, they’re being asked to show up for work. Sadly, the shutdown also seems to have led to a virus, since TSOs are calling out sick at a rate more than double the normal number. According to CNN, 7.6% called out on Monday, as compared to the normal 3.2%. DC did have a snowstorm, so that might have had some effect, but airports such as Miami, which tend to get a bit less snow, are also seeing sick-outs.

The TSA has public opinion on its side for once, but messed that up, too. PR has been a nightmare, with the agency claiming more than once that the illnesses aren’t because of the shutdown. Sure, total coincidence.

At The Airport

It’s safe to assume that long lines will last at least as long as the shutdown does. In fact, it may take months to get back to normal. Why? Because TSOs, who aren’t well-paid to begin with, are quitting. Apparently, the bills don’t stop just because the paychecks do. The TSA is still holding job fairs, but they won’t solve the problem short-term.

So we’re back to the same-old-same-old. Be at the airport early, know your lounges and be prepared to wait. Also, be aware of where and when you are. Most airports are still operating at close to normal levels, but it’s going to get worse before it gets better.

 


*They will eventually receive back pay and have been given a bonus of $500 for working through the holiday weekend. So I’ll assume that other unpaid federal employees will be entitled to the same?

 

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Southwest Offering Companion Pass With EVERY New Credit Card

And now it gets interesting…

It was only a few weeks ago that Southwest was offering 60,000 points to sign up for its Chase credit card. That was a great deal, particularly at the start of a new year. And now they’re dwarfing it.

Companion Passes for Everyone

southwest, chase, credit card, companion pass

Now if we only had Oprah to hand them out. “You get a CP! And you get a CP!”

One of the best elite perks in the industry is Southwest’s Companion Pass (CP), which allows you to fly a friend with you for free. You can get their seat at the time of booking, so there’s no worry. Traditionally, you have to earn 110,000 Southwest Rapid Rewards points to get the pass, so it can be tough if you don’t spend a lot on Southwest or the card. The sign-up bonus counted toward the minimum, so the first year was easier.

For the next month, however, everyone who gets a new Southwest credit card will get a Companion Pass, good through the end of the year.* That’s (almost) a full year of BOGO (buy-one-get-one) on the airline. Pretty powerful deal. Here’s what to keep in mind:

  • You need to spend $4,000 in the first three months as a cardholder to earn the Pass. It’s good through the end of the year. Doing the math, if you got the card tomorrow and spent $4,000 on day 1, you’d have 10-11 months of free companion travel.
  • It’s a fantastic deal for Southwest really frequent flyers. But “all you can eat” may not be as good for others. Here’s why: A Southwest point is worth roughly 1.5 cents. This deal gives you 30,000 points, while the previous one gave you 60,000. That’s a difference of 30,000 points, or $450, which can get you a lot of Southwest flights. If you only fly them 2-3 times per year, you may be better off waiting for the next big points bonus.
  • Chase’s 5/24 rule applies to this card. If you’ve received five new personal cards in the past two years from any bank, Chase won’t approve you for this one. There will be a lot of people ineligible for the card.
  • You can get the bonus from one of a few different Southwest credit cards. Use the link in the second paragraph to get an idea of the differences.

 

Overall

If you’re going to use the Companion Pass, this is one of the best deals that I’ve ever seen to sign up for a credit card.  If you’re not, don’t waste an application on it. Chase credit card bonuses are valuable. Don’t use a chit toward 5/24 if you don’t have to.

 


*While this promotion is pretty widespread now, I first saw it at View From The Wing. If you first saw it here and are getting the card, please use his link to apply for it.

 

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Cruise Lines: Learning From The Airlines (And It’s Not A Good Lesson)

I’m a big fan of cruising and tend to write a lot about them. They’re an excellent value and can be a good way to see multiple locations on the same trip. But one of the trends in the industry, particularly in the mass market, is troubling: fees.

Cruise Lines: Not The New Airlines, But…

cruise, fees

Comes with its very own list of surcharges

Cruises are often thought of as a luxury vacation, much in the same way that traveling on an airline used to be only for the affluent. It was the highest of the high end, with extravagant meals, top entertainment and Fred Grandy all included in the price.

Over the years, though, a few things have changed. First, cruises have expanded to the mass market. That is undoubtedly a good thing, as a vacation that had once been open to only a few is now open to many. Second, most cruise lines are now owned by major corporations, with Carnival Corp and Royal Caribbean owning approximately 75% of cruising capacity, either through their namesake brand or a subsidiary. That’s not as good for consumers. An oligopoly of publicly traded companies (You can throw Norwegian in, as well.) means that they not only have control of pricing in the market but also do anything they can to cut costs or generate additional revenue. And it’s not just the end of the tableside Caesar Salad.

“There’s A Charge for That…”

For the fiscal year ending in November, 2018, “onboard and other” revenue represented 25% of Carnival Corp’s total revenues. That compares to 21% a decade earlier and 18% in 2001. All that free food and midnight buffets turn out to cost the companies money. Or, at least, they’ve discovered that there’s a way to charge for it.

So why is this happening? The answer, not surprisingly, is similar to the airline phenomenon. As cruising became more mainstream, it started to take in customers who were looking for both luxury and value. That comes at a price. The problem for the cruise lines is the same one that the airlines face. Passengers are becoming increasingly likely to book based on the ticket price. They don’t factor in the extras to the same extent. Thus, it’s easier to give a low list price and charge for the add-ons.

New Patterns Of Charges

While there are plenty of opportunities to spend money on ships, the cruise lines don’t want a one-off here and another there. Rather, they are packaging benefits. Noticeably, these benefits target the “pain points” on the cruise, such as long lines at dinner, show availability and getting on and off the ship. Princess, for example, offers “club mini-suites,” which include a private section of the dining room and priority embarkation/disembarkation, in addition to the standard mini-suite product.

There are also packages available which are independent of the cabin you have. Royal Caribbean, for instance, is testing “The Key,” which includes priority times at amenities and reserved seating at shows, in addition to the private dining room benefit. They’re charging $15-25 per person per day, and if one person in your cabin has the package, everyone else must, also. That could be as much as $100 per day.

Even one of the most beloved cruise perks, free room service, could be disappearing on Carnival. They already charge for overnight service, but now, you could be paying for that club sandwich at lunch.

But Cruise Lines Won’t Be Spirit Airways

While I expect these patterns of charges to continue, I don’t see an “ultra-low cost cruise” coming. First, the industry has already tried that. But second, the purpose of a cruise is different than that of a flight. A flight is simply a means to an end, something you suffer through to get to where you are going. On the other hand, a cruise is supposed to be relaxing and pamper you. And if you don’t like a cruise, there are alternative. If you don’t want to fly, enjoy the bus ride to Florida.

The other thing is, it is still easy to have a great cruise without spending another penny on-board. If all you want to do is sit by the pool and participate in the free activities, it’s paid for. If you don’t mind a bit of a wait at the dining room (or are willing to eat at the same time every night), there’s no need to pay extra at a specialty restaurant. Gratuities get added on, but most cruise lines offer deals that include pre-paid gratuities.

Some things won’t change, of course. If you buy a suite, or pay up to be on a luxury cruise line, you may not have to reach for your wallet at any point. You’ll still be paying for all of the extras, but you’ll be doing it upfront. There won’t be any piece-meal charges. And there’s something to be said for that. After all, cruises are often based on that.

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Tuesday Travel Tidbits: Bathroom Beauty, Boutique Airlines, DC Shutdown

Another week, another Tuesday. Or something like that. Here are a few tidbits that struck my fancy this week.

La Guardia’s Fancy Bathrooms

la guardia

Not La Guardia

Every week, Wall Street Journal author Scott McCartney writes a column called “The Middle Seat.” It tends to take a look at some of the more neglected areas of travel. And traditionally, there’s nothing more neglected than airport bathrooms. So last week, we got a lookie-loo at the loo.

There may be no airport in America more hated than La Guardia, with the possible exception of Newark. It’s crowded, dingy and the traffic is second to none (in a bad way). But they’re looking to change that image, so they’ve dug in and designed a restroom that is “flush” with opulence.* Mr. McCartney’s column quotes passengers who are praising the bathroom on social media, because if you can’t share it on Instagram, it doesn’t exist.

But is the article missing the big picture? Absolutely. The real story: How bad are our airports that people get excited about a clean bathroom? I’ll get around to answering that once I finish this three-week old hot dog that I bought at Hudson News.

Boutique Airlines

CNN Travel had a nice article about Cape Air today. It almost sounds like flying could be, you know, “fun.” I’ve probably walked by the Cape Air counters at Logan a million times (more or less) and have noticed that A) people there seem to be happy, and B) there are never any lines. Honestly, before reading this article, I couldn’t have named any airport that they flew to which wasn’t on the Cape.

After having read it, though, I may have to try them out, just for the experience. It’s employee-owned, which means that people care. No flight is more than 90 minutes. And they’re not a fly-by-night carrier; they actually fly 550 flights per day. And they fly during the day.*

But the most attractive thing about the airline is the size of its planes. Nine passengers. Nine. As in, the number between eight and ten. Every seat is an aisle and a window. There’s no pre-boarding because everyone is pre-boarding.

Of course, does any of this matter without a frequent flyer program? Of course, since not only do they code share with other airlines but the also offer a travel pass, which allows you to pre-buy flights at a bulk discount.

Now, if they could only hand out coupon books, like in the good ol’ days. Oh, wait…

What to Do in DC during The Shutdown

I have a bad habit of scheduling trips to Washington DC during shutdowns. Sadly, with another coming up, it’s time to check in on exactly what I’ll be able to do while I’m there. Or, as the case may be, what I won’t be able to do, as the Smithsonian Museums and National Zoo will be closed. And, as you probably know by now, National Parks are open, but unstaffed.

Don’t worry, though: The TSA will still be at the airport, unless they’ve called in sick.

 


*Pun totally intended. I’ve never understood the phrase “no pun intended.” If you’re going to pun, you need to go all out.

 

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IHG Winter Promotion: Free Nights. Faster.

IHG (InterContinental, Holiday Inn, several other brands) has announced its winter promotion, and it continues a long tradition of individualized bonuses. Based on your previous stay patterns, IHG gives you a number of “tasks.” You can complete one or all of them, but usually get extra points if you finish them.

I’ve always loved the IHG promos. Not because they are so great, although they can be. Rather, they are a reflection on how the company looks at loyalty. People who stay with IHG frequently get difficult promos, but ones that are worth a lot of points. People like me, well, don’t. Mine is easy, but for fewer points.

IHG’s business premise is simple. They know that, if you have another primary hotel, they won’t win all of your business. Thus, they’re happy to have you stay two or three more times than you did last year. If every customer did that, they’d have some happy shareholders. On the other hand, if you already give them all or most of your business, they’re set. No reason for them to give you a great bonus for a couple of extra nights.

Generally, these promotions work out best for those who only stay with them a few times per year. Promos are easy and you can earn enough points for a free night. Here’s a look at my offer (Yours will likely be different.). I’ll discuss the offer itself and the concept of “stackability.”

My IHG Free Nights Faster Offer

intercontinental, free nights faster

I can get this all done with two nights.

My targeted promotion offers me up to just over 50,000 points.* IHG rewards typically cost 10,000-50,000 points. It has a mix of tasks, most of which are, individually, pretty easy. The main task is to stay at two different brands during the promo period. No problem. The company has 10-12 brands, most of which are on the cheaper end. Reading the T&C, I also notice that Holiday Inn Express is a different brand than all of the other Holiday Inns (Resort, Select, Vacation). The three brands that I just listed are, for the purpose of this promotion, one brand. Express is a different brand.

The rest of the offer is “a bit of this and a bit of that.” Paying for a stay with my credit card is easy. Buying “bonus points packages,” which gives me extra points for my stay, will only cost me a few dollars. And I can easily bang out a stay in February.

Here’s where it gets interesting: The nights are stackable. That means that I don’t have to stay at two brands, and then two weekends, and then two more nights at any hotels. Rather, I can book a bonus package at each of two different brands, which would fulfill the requirements for the entire deal. The Saturday night stay also counts as an IHG hotel, a brand, paying with my card, etc.

This is a deal that actually does what it’s supposed to: It may get me to schedule a couple of nights at IHG brands. The toughest restriction is the weekend night, but that’s doable.

Be sure to check your own promotion and see what they are offering you.

 


*Beginner’s Hint: In any promotion, it’s important to read the terms and conditions. That statement applies double for this one, which can often get confusing.

 

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RIP, Herb Kelleher

The airline industry lost a titan yesterday, with the passing of Southwest’s founder, Herb Kelleher. It would not be an exaggeration to state that, if there were a Mount Rushmore of modern aviation, he’d surely be on it. Herb was 87 (going on 18).

I only met Herb a few times at industry events, and didn’t get to spend as much time talking to him as I wanted to, but one thing stood out to me: When Herb was talking to you, you were the only person in the room. His eyes never wandered, and he never looked like he’d rather be somewhere else. He genuinely liked people, and he combined a self-deprecating sense of humor with an extraordinary brain that he never felt a need to advertise. His work did it for him.

Southwest Changes The World

Screen Shot 2014-09-09 at 7.12.24 PM

Southwest Airlines changed the world of aviation with its low-cost, low-fare strategy. Originally a concept on paper, Southwest Airlines faced competition from local players like Braniff, who had no interest in any competition. Limited by its inability to fly out of state, Southwest struggled, selling one of its original four planes to make payroll. Ironically, that was the best thing that could have happened to the young company. It forced the airline to be incredibly efficient, maintaining low costs by keeping its planes in the air through its famous “ten-minute turn times.” With the death of airline regulation in the late 70s, Southwest eventually began to fly outside of Texas.  And while The Wright Amendment initially restricted flights from its home, Dallas’s Love Field, to states contiguous to Texas, the rule began to fall apart over time, finally going away entirely in 2014.

The Face Of The Airline

southwest, arm wrestle

An arm wrestling match to settle a copyright claim. Herb lost, but everybody won.

But the airline could never have reached its current heights without Herb. The founder built the airline around its internal culture and how it treated people, with the mandate starting at the top. If you go to Southwest’s corporate offices, the first thing you notice is that their walls aren’t covered in expensive art work. Rather, you’ll see pictures of their employees. And their pets. Herb was known to pass out peanuts when he was on a plane. Many other airline CEOs would run screaming if they ever encountered a passenger. Pilots, often considered the prima donnas of the industry, didn’t get it any easier. I’ve heard stories of pilots being asked to sing in interviews, just to make sure that they fit Southwest’s off-beat culture. After all, the airline was led by a man who reveled in dressing up as Elvis, offered up whiskey in a marketing promotion and joked that he gave up his beloved Wild Turkey and cigarettes one month per year, choosing February, because it was the shortest.

Herb’s emphasis on culture paid off. After 9/11, when airlines had employees lined up to receive their layoff notices, Southwest had pilots who offered to work for free so that nobody had to lose their job (They eventually limited unpaid work to one week per person.). Contract negotiations are as tense as they are anywhere else, but despite the fact that the airline is one of the most heavily unionized in the country, it’s not a zero-sum game for anyone. In the end, everyone expects to come out happy.

The culture flows through to the airplanes. Flight attendants joke around with passengers and like to make funny announcements. In other words, Southwest customers can expect to be treated like humans, a characteristic that is sorely lacking at many of its competitors.

Southwest faces a number of challenges as we move forward, including ultra-low cost carriers and weakness in its technological capabilities, but Herb created an airline that was built to last. Wherever he is now, I hope that they have plenty of wild turkey and a designated smoking section. Of course, he’d ignore the “No Smoking” signs anyway, but nobody would care. It’s Herb, after all.

 

 

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WSJ: Credit Card Companies Cutting Back Bonuses

Yesterday, the Wall Street Journal introduced the new year with an article that may be unwelcome to some members of the points community. Turns out that banks have made a resolution to go on a diet, as well. Problem is, their diet means cutting back on points that they are giving away, not taking in.

Will Sign-Up Bonuses Decline?

credit card

Photo Credit: Creative Commons

Tl;dr for those who don’t subscribe to the Journal: Reward costs are up and consumers are gaming the system. And they’re just figuring this out now?

Clearly, it’s not a secret that consumers are gaming the system. The proliferation of points and miles blogs is enough to show that. But companies are starting to pay more attention to the costs and returns. The article notes that rewards costs were up 15% in the third quarter, while returns on assets have slipped from an average of 5% in 2014 to an estimated 3% next year.

Of course, shaving promotions is not as easy as it sounds. It would be illegal for competitors to get together and decide to cut bonuses. Still, we’ve seen the start of it. For example, Citibank cut back on free hotel night benefits on the Prestige card. Likewise, IHG changed its sign-up bonus. No longer could the free hotel night that came with it be used anywhere. Now, that night could only be used at certain categories of hotels.

But the big sign-up bonuses are harder to cut back. Consumers have gotten used to being rewarded for getting a card. A decade or two ago, 25,000 points was considered a strong promotion. Now, it’s not uncommon to see 100,000 points or more just to get a card and spend a bit.* The card companies have cut back on the number of cards that you can acquire. For example, American Express limits personal cards to one bonus per lifetime per reward type. Chase won’t let you get most cards if you’ve signed up for five or more of any credit card, regardless of issuer, in the past 24 months. It’s known as the 5/24 rule. And both Discover and Capital One have tightened card issuances. Anecdotally, Capital One seems to have gotten more aggressive with serial applicants. Discover is known for giving extremely low credit lines to cardholders with more than one Discover card. Etc.

Will It Last?

We’ve seen articles like this one before, and somebody has inevitably blinked. The problem most companies face is getting people to use their cards once they’ve gotten the bonus. That’s why you see so many cards with category bonuses. The banks offer extra points on frequent occasion purchases (restaurants, groceries, etc.). That gets the card to the top of your wallet. Hopefully, you then reach for that card for all of your purchases. It hasn’t worked out well, though, as gamers have exploited them. If I only use Discover for 5% rotating quarterly categories, for example, Discover eats the costs of the excess rewards but doesn’t make it up through “swipe fees.” I cost them money. At least they don’t big initial bonuses. If I get 100,000 points from Chase and then cancel the card, they really lose out.

What Can Banks Do?

Banks have started to address the issues in other ways. For example, they can limit card benefits or the number of times you can get a bonus. But limiting benefits causes people to stop using the card, which is where they make their money.  Ultimately, it will get reflected in pricing. But until then, enjoy your points. You’ve earned them.

 


*Beginner’s Hint: Don’t get fooled by the large number. For example, 100,000 Chase Ultimate Rewards points is worth a heck of a lot more than 100,000 Hilton Honors points. Heck, even 50,000 UR points is worth more than 100,000 from HH.

 

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