I hope all of you had a safe, happy & prosperous 2018. As I’ve done in years past I’ll offer up my predictions for 2019 here during these first few days of the new year. I’m happy to preface this with the following warning: I’ve been under 50% with my predictions just this past year, so take what follows with a grain of salt. I’m no expert in the future, I’m actually still trying to perfect today. ?
And with that…my 2019 predictions:
American Express Dramatically Improves Membership Rewards.
I know. Shocking…right? But hear me out. I think the program is way too cumbersome and the legacy of it is beyond the level of complexity that even Amex wants at this point; breakage is good–but this is beyond that.
Possibilities including pooling, cash out for ~1cpp (without the Schwab card) or some other type of improvement on the redemption side of the points. I’ll get into some further Amex predictions later, but I really wanted to start with good news in this post, so here we are.
Breakage Based Benefits will Continue to Proliferate
Benefits which are frustratingly hard to use definitely seems to be a trend card issuers are hopping on more and more. American Express’ silly $10 a month ‘food’ credit is a perfect example of this. They can claim $120 a year in credits in marketing materials, and most people would do well if they can even extract $60 in value from these credits.
We’ll see more of this in 2019 as issuers look for cheap/free ways to improve cards without giving away better rewards based on spending. These upgrades that are really not an upgrade (and in some ways just waste your time and money) will be a favorite of all banks for 2019.
Chase Changes for the Better?
This one is out there, I know, but follow me here. Chase will relent and stop the insanity of 5/24 and other associated limiting programs (At least to some extent). I think our discussion in episode 6&7 of the No Annual Fee Milenomics² podcast was a good insight into the issues plaguing Chase right now. Splashing ads for their cards all over the internet, billboards, airlines and elsewhere while continuing to cut down on their potential client list cannot work forever. As Chase welcomes new rewards card customers with points and miles it is strange to think they’re simultaneously asking those same new CC fans to eventually have a decline based on too many credit cards (5 in 2 years).
The number will either be tweaked up to something more than 5 in 2 years, or the number of months looked at down from 24 months (say 5 cards in 6 months).
American Express Downgrades Approvals
The corollary of this is the American Express approval process. Right now it is jokingly easy to be approved for an American Express card. (the bonus might be a different story, but the approval itself is almost guaranteed) It can’t continue to be this way–American express is always seemingly a step behind those who seek to take as much profit from them as possible. I can see them tightening approvals in general, limiting No lifetime targeted offers, and even their universal referral system this coming year as they realize the folly of their past year.
“Mistake” Marketing Proliferates
We’ll see more of these “Mistake” marketing Sales. We’re a large enough, and calculable enough group that we are being pushed around for company gains now, not just in these fare sales. The power of these limited date/location sales to saturate social media is a force more airlines will start to use. The “We made a mistake but are honoring it” narrative also makes for a PR win after the fact.
This one is harder to quantify–to make scoring at home easier, I’ll say there will be at least 4 of these this year.
Citi Being Citi
Citi will give up on TYP this year as the program collapses under the pressure from MR and UR. A revamped currency will be created to replace it, and will be no better. The splash this program makes on major blogs will subside quickly.
Citi really seems like the third wheel here. Their program is tougher to use, and full of odd issues. Sometimes that’s a good thing because it allows for outsized gains. But mostly it is just a source of frustration, which probably leads to less breakage than programs like UR and MR.
Ultimate Rewards Devalue in a Big Way
I’m stealing this one from Robert’s list of Predictions last year. He was pretty (thankfully) happy there wasn’t any major movement from Hyatt, but I think this year there’s too much pressure that something has to give. The idea that Hyatt has created a currency that is the most powerful to earn (via Chase UR) and simultaneously gives better than average redemption value cannot go on forever.
While I’m not singling out Hyatt here, I do think we’ll see the first non-1:1 partner for Chase UR. How they’ll spin that–I can’t wait to see.
Earning Points and Miles Will Be Harder in 2019
Big shakeups will continue and earning points and miles, at least nationally, will be tougher. All Manufacturing is local–and 2019 will be no different, as the trend away from large brands allowing massive misuse of their financial instruments will continue down. Very few companies can afford the costs associated with our shenanigans, so a promo like the past Plastiq/Masterpass one will not materialize in 2019. That’s the liqudation side–but purchasing will get tougher as well.
Chase will shut me down. Or my wife. Or Robert.
There are a few things going right now with respect to earning Chase UR which are just too easy. I cannot see these things continuing forever. A combination of two cards with $190 in annual fees can bring with them $7,000 or more a year in profits with little time invested. That’s unsustainable, and something that I think Chase will absolutely look at as it thins unprofitable customers.
Wrapping it up
So that’s my list. Do I hope I’m wrong about a lot of these? I sure do (especially that Chase one). But overall I’m continuing my bearish bias in the points and miles world in general.
– Written by Sam Simon. All ideas are my own, but I encourage you to see my point of view and I promise I’ll try to do the same. Connect with me on Twitter @Milenomics.