I recently made a deposit at one of my banks through a drive through banking window. I was happily told by the teller that because I was such a good customer I would be receiving a 5% cash back bonus on all my charges on my cash back credit card. That's nice. I though I was currently receiving 1% on everything and then additional amounts for various other categories. Several companies give 2% or more back for gasoline.
I went to pay off my monthly balance as usual and I check to see what my rewards balance was in order to see if I was ready to apply the cash back to my current statement. Unfortunately, I found that I only received the 1% cash back on everything but none of the additional bonus features. I had received them on months prior but they seem to have stopped. I also did not receive the 5% cash back on the charges for the month the drive through teller had mentioned.
Later, when I had all my information, I called the bank to inquire what changed. I was told that there was a new cash rewards credit card with the percentages I expected and they would be happy to open me a new credit card account and split my current credit line between the new accounts.
Since the cash back rewards is specifically the reason I am using this credit card, I ordered the new card and expect to close account I now have when the time comes as the man suggested. Of course, that is only after they adjust the credit line back to the full credit line on the new account.
My question is this: Did they by their right to do so, change the previous card bonus program? Or was it possible I had other promotional offers giving me the additional bonus features and I did not realize the difference between my card and the advertisements I was seeing?
In any case, I think it's more than just a little underhanded for a bank to promote a new credit card with the same name logo as their existing credit card and not let existing customers know that their card is different. They could do this every year with new promotions and lock the existing customers into their existing, likely lower, promotions and only give the new promotions to the new customers. I understand that the promotions are exactly that - promotions to get new customers.
What I learned: I have to constantly monitor new options and promotions on all of my accounts to know if I am getting the lowest interest rate, the rewards or cash back I am expecting, or other points I think I'm getting.
What I plan to do: First of all, I called the bank and inquired to find out why. The bank offered a resolution and I decided to take it.
In the future, I will set up a time twice a year at least, to verify my current rates and rewards on all my accounts. I actually do a quick check each month when I pay my bills online, but this new additional check will be added to my twice a year Budget Planning Checklist.
Cautions on this topic:
- Pay off your credit cards every month if you use them to avoid interest charges. This subject of using credit cards is not intended to suggest that keeping credit card balances in your financial plan is a good idea. See related topics for discussions on the use of credit cards.
- Closing a credit card account as the bank suggested affects your FICO score because you are lowering your available credit line. Be sure to plan accordingly. This could be a way for the bank to lower their risk without your awareness.
- Don't let rewards programs of any kind change the way you spend your money! Getting rewards on how you've decided to spend is one thing. Allowing rewards to change your plans is rarely a good idea and usually does not consider your overall goals and wisdom. Stick to your plan and be diligent to stay on track.
Words to the wise:
Managing your finances is a constant effort. That does not mean that it has to be hard, it just means you have to be diligent to keep paying attention so that when things change, you first notice and can respond according to your plan.Grace to you.
