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US credit card issuers pull back on rewards

US credit card issuers pull back on rewards
US credit card issuers are pulling back on rewards programmes on credit cards and continuing to increase APRs and fees.
Those are among the findings of the latest Lightspeed Research Card Terms Tracking Study which assesses the changes in terms notifications mailed by the top 10 US credit card issuers in the past month.

The February study found that Chase had informed WaMu cardholders that their card rewards programmes would be converted to Chase rewards as a result of Chase’s acquisition of WaMu. Discover eliminated the middle 0.5% earning tier on selected cash back products.

Other major findings in the February report include:
* Top card issuers focused on setting higher margins for variable-rate APRs. Eight of the top 10 card issuers introduced new pricing effective within the next 90 days. Issuers also changed cash advance fees and increased late fees on some balance tiers.

* Wells Fargo Financial introduced increased pricing on certain balance categories with existing cash balances grandfathered at the existing rate. This is among the first UDAP-compliant pricing changes observed.

* Citi increased cash advance fees on a number of products to 5%, an increase over the prevailing rate of 3% fee that is most common among top issuers. Wells Fargo notified cardholders of a 4% cash advance fee and increased the maximum from US$75 to US$99.

On a monthly basis, Lightspeed Research gathers Change in Terms statements directly from customers of the 10 largest issuers in the US, as well as from other mid-tier issuers. The information from these statements is analyzed to compile changes in cardholder terms including interest rate calculations, billing period/cycle changes, penalty pricing, and fees.

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