News and notes from around the interweb:
- American Express Membership Rewards is offering a 20% bonus on transfers to Hawaiian Airlines HawaiianMiles through January 31, 2023. They offered this same bonus twice last year (in previous years they offered as much as 25%). I used one of last year’s offers to confirm upgrades on my Austin – Honolulu flight. That’s one of the few decent value propositions in the HawaiianMiles program.
- I know people care that the value of Chase’s Pay Yourself Back has been slashed, with Reserve cards generally getting 1.25 cents apiece in eligible categories and Preferred down to just a penny. But I was never able to bring myself to use points this way anyway, transfers to miles and points have always gotten me more value than this and continue to do so, so it wasn’t something I’d ever do. Still, worth knowing.
- Emirates absolutely gutted the value of Skywards, but it gets even worse, they’ve ratched up fuel surcharges on transatlantic routes 10x. I guess Emirates doesn’t want a frequent flyer program anymore, or U.S. credit card points transfers (they partner with all the big currencies). Meanwhile Dubai is eliminating its tax on alcohol sales.
- New Miles & More Mileage Bargains 55,000 mile business class roundtrips to Europe.
- Couple takes nearly $600 rideshare from St. Louis to Omaha after flight issues
- Caption this.
- Someone has been leaving explicit photos around Disney resorts
Cashback being slashed – inflation is hitting the rewards business. The interest banks have to pay on the free float they give pay in full customers is starting to hurt. One of the reasons credit card fees were high in the first place was free float in the 1980s, and there banks needed to pay the 18% annual interest to get money for floating balances for about a month. A 1.5% monthly interest the bank is paying to borrow money starts to hurt quickly.
As interest rates dropped, banks started looking at what they could do with the fee income to convince people to move more of their spend to credit cards. I wonder what interest rates would need to be before the whole rewards proposition doesn’t make sense.
On the other hand, higher interest rates start to make the convenience fees paid when making official payments via credit cards less painful when it means one can keep money in an interest bearing account longer. On airline credit cards which allow gaining status at least partially from spend, essentially the transaction fee can be considered spending money for status. If one already has to pay rent or property taxes, the convenience fee is a cheap way of doing it, certainly cheaper than flying. Combined with delaying repayment and keeping the money in an interest-bearing account, it gets even cheaper.