SARAH MCCAMMON, HOST:
This time of year, credit card companies make big promises to stoke demand after the holidays. Sign-up offers, rewards point bonuses, airline tickets. But the Consumer Financial Protection Bureau is warning that some of those promises may not be real. The bureau says companies may be breaking the law by devaluing credit card points and airline miles. Joining me now to talk about this is Nick Ewen, senior editorial director at The Points Guy, which is a website all about credit card rewards. And we should note the site makes some of its money through credit card referrals. Good morning, Nick.
NICK EWEN: Hi. Thanks for having me.
MCCAMMON: So just to start with, how are these credit card reward offers supposed to work?
EWEN: Yeah, so generally, if you're being enticed to sign up for a new credit card, most credit card issuers will offer you some kind of reward after a certain amount of spending. Sometimes it's a single purchase. Sometimes it's $500. Sometimes it's $10,000. And if you spend that amount in a certain period of time, you'll take home a one-time haul of cashback or points or miles. It depends on the individual card.
MCCAMMON: What kind of problems have people been experiencing when it comes to companies perhaps overpromising some of these rewards?
EWEN: Well, I think it's important to note that the Consumer Financial Protection Bureau report was based on complaints that they received. And obviously, they're not going to receive information from people that are happily using their rewards. But there are definitely some instances where partnerships might end and certain benefits are no longer going to be available. And the credit card issuers try to announce that far in advance.
And oftentimes, these are on a monthly statement that you receive, or there's a letter that you might get in the mail. You should always have email communications set up so that you get that notification of any changes. And then ultimately, if there is a term that is changed, it's on you as a consumer to say, you know what? This is no longer worth it. I'm going to go ahead and I'm going to cancel my credit card and use up those rewards before I do so.
MCCAMMON: What about airlines? I mean, what happens when they change their terms or perhaps devalue their points?
EWEN: Yeah, so I think airline miles are really popular when it comes to credit card rewards. You hear them hawked on flights and everything like that. And sometimes, things change simply because partnerships are no longer in effect. Airlines can move from one alliance to another, and all of a sudden, you're no longer able to use miles on a certain international partner. The big thing here at The Points Guy we always tell our readers is earn and burn. Once you have earned those miles, don't sit on them because these things can change.
MCCAMMON: Aside from educating consumers and telling consumers to sort of be aware, is there anything that regulators can do to make sure that companies are being clear, being transparent, honoring their commitments to their customers?
EWEN: Well, I think there have been many instances where legislators have been able to do this. Look at some of the approach to cracking down on airline pricing. So years ago, airlines would tack on all these added fees and taxes, and everything like that, so the real price that you paid wasn't displayed until the final step. That has now changed, where if you are booking a flight, you see upfront all of those costs bundled together. Unfortunately, this hasn't happened with some of those other kind of junk fees, and regulators are really starting to get that political will to implement some of these things.
MCCAMMON: Nick Ewen is senior editorial director at The Points Guy. Thanks so much for your time, Nick.
EWEN: Thanks so much for having me. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
