Credit cards are better than cash. No need to carry a pocket full of cash. Unpredictable expenses? No Problem. And, the points and benefits: something for nothing, perhaps.
In the U.S., Citi is overhauling some of their card features. The bad news is that cardholders will lose some perks; the good news is that some rewards will convert to cash at the point of sale (POS).
First, the bad news. According to an Associated Press news-pickup:
- Citigroup will discontinue free trip insurance and price-protection guarantees from all its U.S. cards, while other perks, including car-rental and lost-baggage insurance
Nerdwallet reports a longer list:
- Citi Price Rewind (a form of price protection).
- Trip cancellation and interruption protection.
Other departing perks, depending on the Citi card, include:
- Worldwide car rental coverage.
- Worldwide travel accident insurance.
- Baggage delay and lost baggage protection.
- Travel and emergency assistance.
- Roadside assistance dispatch.
- Trip delay protection.
- Medical evacuation.
- Damage and theft purchase protection.
- Missed ticket protection.
- 90-day return protection.
- Extended warranty.
Free trip insurance is a good, but not a great feature, yet price protection can be a handy benefit if you do not live in a major metropolitan area or do not use comparison sites such as PriceGrabber. Citi’s price protection program was nice. If you registered a particular purchase, their system would keep an eye out for price reductions and credit you with the difference. It is handy, but if you are a frugal shopper, the benefit is minimal. In the past ten years, my Citi account got me one price match, on a $500 polaris pool sweep. I received a $20 statement credit. Nice but not that nice.
Now, the good news. Mastercard, the payment network, is deploying a POS rewards feature; Citi is part of the pilot. The new Pay With Points feature allows the cardholder to get an instant credit at the POS. According to Mobile Payments Today:
- Citi said that starting in July that ThankYou members would be able to use its new Pay With Points feature to get push notifications after eligible purchases and use accumulated points for a variety of rewards, ranging from groceries to entertainment and department store purchases.
- Citi is the first major issuer to allow U.S. cardmembers to apply their points in real time for shopping or dining, according to the company.
- Citi officials cited data showing 86% of customers would redeem their points if they could do it in real time.
The best news about Pay With Points is not in the fact that you can cash in rewards at the POS. Today, you can cash your points at the website in real time. There is not much difference between getting the credit in real time while you are shopping at Macy’s, and pushing the credit when you return to your laptop and trigger the rewards yourself.
What is exciting here is where Mastercard and Citi can take real-time rewards. Will they add POS coupons as this develops? Cross-sell pushes? Or, link to installment lending incentives.
It remains to be seen. Until then, the current format will spark some attention.
Just stay away from point devaluation; that will set off a consumer frenzy.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group