Buzz
In an effort to retain customers who sign up for credit cards for a one-time bonus and then cancel soon after, issuers are now rolling out annual point bonuses, as reported by CNBC.
For instance, the Southwest Rapid Rewards Priority card offers 7,500 points each year on the card anniversary (plus 25,000 points if you spend $15,000 in the first year). Similarly, the Barclays Arrival Premier World Elite card, a travel card, rewards users with 15,000 bonus miles annually when they spend $15,000. The Wyndham Rewards Visa Signature card offers 6,000 bonus points yearly.
The strategy goes beyond one-time lump sum bonuses. According to CNBC, Bank of America’s Premium Rewards card offers rewards bonuses to those with high bank balances, earning up to points per dollar spent on travel and dining.
Card issuers and banks have recognized that many customers don’t frequently switch cards, prompting them to focus on building loyalty upfront, while also discouraging people from signing up just for a one-time reward before moving on.
As with any financial product, make sure to review the terms before signing up, and pay attention to the terms and conditions. You probably won’t change your spending habits just because you’ve got a new card. For instance, are you already meeting the minimum spending requirement? It may not be worth getting a rewards card with an annual fee if you’re not planning to take full advantage of all the reward opportunities.
