It was supposed that the golden age of generous rewards from credit cards would end with the new credit card rules. Before the provisions of the CARD Act came into effect many experts felt that credit card issuers would lose billions of dollars which would indirectly affect the rewards that they offer on the credit cards. But 6 months down the line, the rewards on the credit cards still exist and there has hardly been any change in that aspect.
Some of the more popular credit card issuers of the frequent flier cards are saying that they are looking for various ways in which to improve the card and there has been quite an interest shown by people who would want to earn free flights. Chase card services` senior vice president, David Gold said that his company has seen an impressive growth in some of the frequent flier cards offered including the Continental Airlines OnePass Plus Card and customers are expecting more from these cards. According to David, their cards are doing well with Continental. These frequent flier miles are very valuable and over the years the value has been retained.
According to analysts, the Credit CARD Act has had very less effect on frequent flier cards. This is because these cards are usually held by the wealthy customers who have a higher than average credit rating. These cards hence really do not depend on the late fees or interest rates as the other cards. The credit card issuers in these cases actually make more money from heavy card usage by the customers and the annual fees that is levied upon these cards.
The sector is however, under immense pressure over the last few years. This is because of competition from other credit card rewards. There is also a growing perception that the airlines are restricting the availability of these free tickets and making them harder to redeem. An Aite Group Survey in 2009 has found out that only 47% of the respondents were actually interested in points that can be redeemed as a plane ticket. Other more popular categories include cash back and rebates on gas and groceries along with points for gift cards and merchandise.
The redemption has been found to be difficult and an IdeaWorks` survey showed that there were no award seats available in 85% flights sampled from US Airways and Delta. In case of other major airlines in the country, they were not available 25% to 45% of the times.