Can We Blame Trump for Mid-Year Credit Card Devaluations?

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How did we so quickly reach a point in travel where mid-year devaluations are commonplace?

Around 2012-13 is when airlines, Delta in particular, ramped up mid-year changes to elite programs. Prior to that, programs more typically were announced for the year and held for the year.

5 Years of Rolling Devaluations

In my own travels I note Delta’s April 2013 devaluation of same-day confirmed as a key moment when a travel benefit I specifically valued in earning elite status was yanked out from me during the year. I then challenged to United 1K and split my business. Fly to a meeting on Delta to be on time, fly back on United to get an earlier or later flight.

Airlines copied Delta, hotels copied airlines, and now in 2018 we see a spate of major credit cards radically changing/devaluing their offerings without ‘grandfathering in’ benefits on cards for the balance of the year even for customers that have paid annual fees.

Now Credit Cards, Too

Examples from the past month include:

  • Chase IHG card devaluing the anniversary night, even for customers that have not had a single one (this move only partially walked back by Chase).
  • Amex SPG card everyday spend devaluation and other changes, so that cardholders who even pay their annual fee in July will have a year of devalued spend and not earn one of the new anniversary nights until the following year’s annual fee.
  • Chase MileagePlus Explorer card changes, just announced with effect from June 1, that remove the annual 10,000 miles bonus on $25,000 spend, while changing/adding other things. This affects the personal card, not the business card. To some cardholders, the other changes to the card may be seen to them as positive.

Chase Explorer Card 10k Bonus

The Explorer card dropping the 10,000 mile bonus is a hit to travelers who spend $25,000 on the card specifically to earn an United status Premier Qualification Dollar (PQD) waiver for Silver, Gold, and Platinum levels. The waiver will continue at $25,000 spend, but the 10,000-mile bonus will only be honored to customers reaching $25,000 for the year by June 1. Those reaching $10,000-$24,999 will get 4,000 miles.

Compare to just last year when the Chase Fairmont card was discontinued and Chase was generous in allowing those with less than a cardmember year to spend $6,000 instead of $12,000 to receive a last free night certificate.

10,000 miles certainly doesn’t cost Chase-United what a Fairmont free night does.

How did we get here?

Some blame must accrue to Trump and the defenestration of the Consumer Financial Protection Bureau by Mike Mulvaney (A paragon of public service: “We had a hierarchy in my office in Congress: If you were a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you. If you came from back home and sat in my lobby, I talked to you without exception, regardless of financial contributions.”)

Banks surely aren’t as worried CFPB acting on customer complaints as under the prior administration. I doubt this is more than a nice plus in the calculations of banks.

These type of changes didn’t start with Trump, only accelerated, and are more likely coincidental to his imperium in our culture rather than causal.

It seems all these companies are using their data and spreadsheets to see just how far they can push customers before customers abandon the product or loyalty program. For all that travelers talk about leaving A to go to B, switching is hard, loyalty from customers is sticky, and we keep proving we can be squeezed and still take more.

Yet I’m Now Going to Spend $20,000+ This Month

Me? I was on the fence about re-upping United status this year so have only been slowly doing my Explorer card spend. Chase’s move just got me to put over $20,000 on the card this month and string me along another year.

I’d love to requalify with United in the manner of my Seattle-Newark flight this past Sunday: book United, when 3-hour operational delay posts, get rebooked on Delta, get my Delta upgrade, arrive on time to a Sky Club breakfast and shower, earn mileage credit from both.

Not that I could have known at the time, I regret years past canceling the MileagePlus card business version and keeping the personal, as the business version stays the same for the time being. Under Chase’s 5/24 rule, no chance for me to be approved for the business card now.

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Jim
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Jim

Sad you haven’t the courage to make comments like this about the previous administration.

DaveS
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DaveS

If I’m reading this correctly you reacted to Chase’s change in the terms of the MileagePlus card not by canceling it, but by suddenly putting $20,000 spend on it. I suppose that would tend to make Chase think they were doing the right thing by changing the terms as they did, and encourage them to do it more often. Tragedy of the commons.

derek
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derek

Trump is to blame for Southwest Airlines Flight 1380’s engine explosion. He is also to blame for the end of the IHG Rewards Club Select MasterCard, the $49 with an unlimited choice of a one free night per year. Trump is to blame for the end of Virgin America. He is also to blame for the delay of the opening of the Alaska Lounge at Terminal 7 at JFK.

I am not kidding. All Trump’s fault.

DaninMCI
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DaninMCI

I’m pretty sure he is responsible for the death of JFK. He likely was behind the fence on the grassy knoll 🙂