Posted by William Charles on January 8, 2019
Misc

Published on January 8th, 2019 | by William Charles

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2019 Predictions: AmEx Refresh, Bonus Restrictions, 3% APY & More

Every year I like to make a list of predictions, I just took a look at my predictions for 2018 and the results were ugly so here’s hoping I do a better job this year (or a worse job depending on the prediction and what we actually want to happen).

Other bloggers

Below is a list of other sites that have made predictions for 2019 in this space. If you’re a blogger and have made some predictions, let us know in the comments so I can add it here.

My Predictions For 2019

American Express Will Continue To Refresh Its Card Portfolio

American Express made some major changes to cards last year (e.g business gold, personal goldbusiness platinum). It’s already rumored that they will be making changes to the green card as well in early 2019. This trend will continue, this isn’t so much a prediction as I know it’s something American Express is heavily focusing on internally.

Focus Will Shift From Sign Up Bonuses To Ongoing Value Propositions

More and more focus is being put on lifetime customer value and trying to focus on acquiring long term profitable customers rather than just mass acquisition. This is another trend I think we will see continue, especially from American Express. Expect more category bonuses & monthly offers (e.g GrubHub credit). Don’t get me wrong, we will still see strong sign up bonuses because card issuers are hesitant to let new card member numbers drop too low.

Sign Up Bonus Rules Will Continue To Tighten, More Work Arounds Will Appear

I think it will become more and more difficult to get sign up bonuses from all of the major issuers. Last year saw the Chase 5/24 rule expanded and early 2019 we’ve already seen Bank of America introduce a new rule. I think we will see more rules/restrictions added, but I also think we will see more ways to by pass these rules as card issuers begin to experiment more with finding profitable customers that ‘fail’ those basic rules (think Chase in branch pre-approval offers).

Basic Savings Rates Will Hit 3% APY

Basic saving rates are currently at 2.5% APY, last year I said we’d see rates hit 2% APY and by the end of 2019 I suspect we will see rates hit 3% APY. When high yield savings rates start getting this high then we need to start considering how valuable 0% introductory APR + no balance transfer offers are as arbitrage becomes a real possibility.

Capital One Will Introduce A Premium Card

Think of something that competes with the Chase Sapphire Reserve/American Express platinum. Traditionally they have focused on those with no/bad/middle credit, but with the introduction of airline transfer partners I can see Capital One making a play for high value personal cardholders.

Final Thoughts

For once I’ve forbidden myself from making a prediction about mobile wallets, because it seems I’m incapable of getting that one right. I’m looking forward to seeing what 2019 brings, feel free to comment on the predictions I made or make your own in the comments below.

 



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Max B
Max B

Thanks for sharing. I was waiting for this article to come out.

G
G

I agree but would like to add one more: Citi IT will get even worse.

Parts Unknown
Parts Unknown

Why do you think Chase & Amex have taken such different paths lately? Amex has refreshed a number of cards, upped AFs, allowed self refer bonuses, etc. with more changes on the way. Chase hasn’t done anything except make their cards harder to obtain (can you imagine Chase allowing you to self refer, or sending out pre-approval email offers for their customers to share?)

projectx
projectx

Pure armchair speculation on my part, but it seems to me Chase is winning the credit card wars, and is now happy to stand pat. Amex however was falling behind, and feeling the pressure to gain market share. Hopefully this works for Amex, and Chase decides to counterpunch

Eric
Eric

I’d agree – after the CSR was launched and Citi getting the Costco contract, it seemed that Amex was kind of in maintenance mode. The new leadership seems to be interested in getting back into a growth mode.

gary
gary

Chase at least lost their battle for me..I haven’t been able to apply for an account because of the 5/24 rule and because of this and other issues with chase investment and banking fees. had closed all of my accounts with the exception of 2 chase cards that i am doing very little on and might be closing soon with the latest devaluation. I cant get the card i actually want and would use so because of this i have diverted any spend to other issuers. If they even allowed exception to 5/24 by just saying no sign up bonus I’d be OK with but their draconian methods leaves a bad taste

Debit
Debit

Chase is losing the credit card wars. The line is not yet profitable for b them and they are trying to monetize the relationships they have instead of trying to get more..

Credit cards are bread and butter for amex. For chase this is a very small part of the business.

Chaser123
Chaser123

Its only 4.4 Billion dollars in revenue. Also taking a charge does not mean its unprofitable. The credit card business is very profitable.

Stephen
Stephen

I think it has to do with their long standing approaches. Chase didn’t really “go for” the premium market, which amex owns/ed, seriously until the CSR. They had a lot of learning to do (despite poaching amex talent), and it showed when their points liabilities shot up more than they expected. So they are really trying to find the balance still.

Whereas Amex has first mover advantage here (by years), and were already in a “digital transformation” mindset after the loss of Costco. My guess is refreshed cards were in the works but they were accelerated and the changes modified to keep up with current trends. And, I’m sure the NYT article last year also lit a few fires under Amex haha.

Edit:clarity

sdsearch
sdsearch

What do mean Chase hasn’t done ANYTHING? They have refreshed cards, but unlike Amex, they’ve only refreshed partner cards so far. They brought out a new IHG card to replace the old one, and a new Marriott personal to replace the old one, and automatically refreshed the Marriott business card, all in 2018. And they also refreshed the United Explorer card (and shortened its name).

Parts Unknown
Parts Unknown

Guess that says something about Chase when I’d pretty much forgotten about these changes and I already have the old IHG & Marriott biz cards.
Amex & Citi have both revamped their own (non co-brand) cards significantly, with more changes on the way. Chase went from having the most buzz worthy product (CSR) to being an also-ran, to my mind anyway.
Amex & Citi have their sign-up bonus rules, but at least they allow you to obtain their cards even if you’re not eligible for the bonus. Personally I find it amazing that co-brand partners allow Chase to restrict card eligibility so much. I mean, you can’t get a Southwest credit card with 5/24? Really? Southwest? The airline with a ‘cattle call’ is more restrictive than an Amex Plat? United, the airline that drags people off planes? Who says they’re lagging behind their airline competitors in terms of card utilization & spend, gee wonder why?

Matt V
Matt V

Arbitration or arbitrage? 😉

Ozymandias
Ozymandias

Came here to say that. Beat me to it!

Adam@ProudMoney.com

Posted a video on 2019 predictions here: https://www.youtube.com/watch?v=V-8JaBqicl8

I focused more on Citi’s lineup revamp and Discover’s need to go a little higher-end as the economy gets iffy and lower-credit customers become riskier.

Adam
Adam

Thanks for adding it to your list!

Eric
Eric

I’m sure they’ll get around to it, but I’d like to see Amex do something with the ED/EDP – after the initial launch, it always felt like a not-bad card that was ignored (they went right back to heavily advertising the BCE instead). In terms of rewards I’m not sure, but 2x-2.4x or 3x/4.5x for groceries doesn’t seem to pair as nicely with the new Gold – it seems that Amex is trying to make the MR charge cards pair nicely with each other, so one could assume the sole current MR credit card should, too.

Outside of how it works, I’m thinking this and the BCE/BCP might be due for a design refresh. While the clear design is kind of neat, the hologram gets beat up quickly – the Cash Magnet design could translate over to BCE/BCP easily (especially since they’re in the same “family”) and a grey/silver version could replace the ED/EDP – almost like a modern take on the old Optima Platinum look? Another idea is all-white for the people out there missing the Zync design. 🙂

Ethan Steinberg
Ethan Steinberg
lilurbanachiever
lilurbanachiever

I doubt we’ll see 3% ‘mainstream’ savings rates. I’d say a pull back to <2% is more likely.

Sam
Sam

It depends on what happens with the interest rate.

Lrdx
Lrdx

Markets are betting on no further FED increases. The treasury yields are as flat as Kansas. I don’t have high hopes hitting 3%. Maybe only for a short period before they start falling.

sdsearch
sdsearch

Markets are not betting on NO further FED increases. They’re just betting on them coming at a much slower rate in 2019 than in 2018.

MM
MM

Been so long since the days of easy arbitrage opportunities due to nice interest rates. Would definitely welcome the return of that!

Frank

I’m not sure I really believe the “Ongoing Value” propositions — your average CC user picks a card and sticks to it so you want to lure them in because if you miss them they are gone. Similarly there’s no point in rewarding long term loyalty (to a card) because the average user is going to be sticking with that card anyway.

e.g Better to pay a handful of customer $500 once when they are going to cancel in a year then pay all your customers $20 every 2 years (or whatever)

From personal experience I used the same Cap One QS card I started with (still do) because it originally had a sign up bonus. While I have switched to churning, some basic spend still goes on that card (and I’ve exceeded where a 2% card would have been a better choice from the start).

Blue
Blue

That’s the way CCs have bet for a long time and its why churning worked for so long. Now there is a big enough pool of people signing up for cards and cycling them with some frequency that they need to figure out how (or if) they can shape that behavior to make money.

tro
tro

It depends on whether you think “picks a card” is synonymous with “signs up for that card”. It can be, as in your case before you started churning, but many people who primarily use 1 card do have at least one other card, they just like the simplicity of only using one card. In that situation it’s not true to say that “there’s no point in rewarding them because they are going to stick with that card anyway”. Give them a reason to stick with your card vs. one of the 1-3 others they have (or the new card they are considering for the first time in 5 years or whatever), instead of waiting to lose them and then trying to win them back. This is where the 4-5x bonus in a category like gas/dining shines IMO, it feels like a big bonus & generates a disproportionate amount of ongoing positive feeling towards a card even if it’s not the majority of spend.

Brandon
Brandon

I think all your predictions are safe this year. But I think the true 3% of basic savings is when the majority hit it, specifically when a big bank who has been doing online banking for years hits it. And if that is the case, I don’t expect 3%, I expect closer to 2.75% for the big banks.

Blue
Blue

Someone at Amex finally realized they have huge brand value in the Green/Gold/Platinum portfolio of cards. Cleaning up the whole Gold/PRG, BRG branding mess is a huge first step to fixing that but Amex Green IS the iconic card so a strong finish with it makes sense.

That same philosophy will probably turn to giant mess that is their Blue branding on the credit card side of things. I think we’ll see the first steps in fixing that and perhaps shifting Blue to an only biz line. Kill the remaining Blue Businesses, rebrand BB+ to “Blue for Business” or something similar. Kill the Old Blue Cash and the remaining basic Blues and Blue Skys that are floating around. Figure out some way to integrate Cash Magnet/Blue Cash/BCP into one or two Blue branded products.

Blue
Blue

Or, maybe kill Blue as a consumer product entirely and have the ED line for consumers.

Lrdx
Lrdx

Not gonna happen, unless they also add 1c / MR statement credit redemptions. People going for cashback and points are different class.

Debit
Debit

Last couple of days to cancel merc benz platinum. What do you think doc? Bonus clawback if closed within one year?

alvinroast
alvinroast

Don’t you have 30 days from the bill to cancel? Wouldn’t that put you at 12+ months?

I’m really curious, because I just did this with two Delta cards and plan to do the same with MB Platinum if I don’t receive a decent retention offer.

mary w
mary w

Yes, you do have at least 30 days to cancel after annual fee is billed.

Denis
Denis

It should not be “within one year” if you cancel after AF hits. You have 30 days to do that.

John
John

I predict Amex will continue to add MR transfer partners to attempt to replace the loss of Starpoints

Sam
Sam

1. Chase will add 48 months language to more cards.
2. Amex will open a new charge card. With the rumored added benefits to the Green Card, I believe the AF will increase to around $150, and predict that they’ll open a new card with an AF around $95. (With maybe 1.5 MR/$1 spent.)
3. Chase will add grocery store purchases as a permanent bonus category to one of their cards (or a new one).

For the first prediction I hope to get a negative point. The other 2 might be wishful thinking.

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