Posts Tagged ‘discover

18
Aug
09

Rack that credit card debt

Months before a new law restricts the credit-card industry’s ability to raise interest rates and charge fees, card issuers are scaling back programs that offer lucrative rewards such as frequent-flier miles and cash rebates.

Alaska Airlines says the cost of companion fares available through its Bank of America Visa Signature card will double from $50 to $99, effective Oct. 1. The airline also will eliminate the 2,000 free anniversary miles granted annually to cardholders, starting Dec. 31.

American Express will increase to $99 from $75 the maximum fee customers in its Membership Rewards program pay to transfer points to any U.S. airline loyalty program. In June, it decreased its rebate to Blue Cash cardholders for all purchases except everyday ones such as gas and groceries to 1.25 percent from 1.5 percent.

Discover has eliminated one of three tiers in its cashback program. Previously, customers received 0.25 percent of the first $1,500 spent, 0.5 percent for the next $1,500, and 1 percent for anything exceeding $3,000. They now will receive 0.25 percent back for the first $3,000 spent and 1 percent above that.

Citi has altered its travel-redemption program. Previously, customers could redeem a domestic round-trip airline ticket valued at up to $400 for every 20,000 points earned. The same ticket now would require 40,000 points.

The changes come after warnings from bank executives that the new law, which takes effect in February, will limit their ability to set interest rates and fees based on each borrower’s risk. That, in turn, would make lending money more expensive, forcing banks to withhold credit, charge new customers higher rates and increase annual fees, executives have argued. NO, it won’t make lending money more expensive…it will make it LESS profitable…

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