Credit-Card Companies: No Guarantee

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It’s the best-kept secret that only impacts, oh, about 189 million of us.

Today, I’m breaking the silence on something that most financial planners — including myself — never talk about: credit cards. I spend my life speaking to clients about things that can make or break their financial futures, including last-minute alterations to Social Security benefits and changes to state and federal taxes. But for some reason I never talk about changes to the “plastic” that 189 million American adults are carrying in their back pockets right now.

Despite the credit-card industry’s excellent advertising campaigns — from angry Vikings to Samuel L. Jackson — I have continually refused to take the time to figure out the right credit card for me. I made a decision on one card 33 years ago, and another 20 years ago, and for the last few decades I’ve just been assuming things are “pretty good” every time I swipe. But I’m not the only one stuck in that rut. According to CreditCards.com, an incredible 40 percent of cardholders have never changed their primary card.

Introductory bonus offers from credit-card companies are now almost three times what they were a decade ago. Today, a $500 sign-up bonus for spending $3,000 is commonplace. In today’s credit-card landscape, you could be missing out on a lot of good freebies — or you could be getting royally screwed. Let me break that down for you.

What may shock many cardholders is the fact that there’s no guarantee their card’s perks will even be here tomorrow. Countless card companies are reneging on offers that they dangled to attract customers a few years ago.

A few with reduced perks include:

  • American Express: restricted the number of guests allowed in the Centurion Lounge for Platinum and Centurion cardholders.
  • Chase: removed price protection from its Sapphire credit cards.
  • United MileagePlus Explorer and Visa Signature: removed price and return protection and reduced trip-cancellation insurance.
  • Citi Prestige: stopped offering American Admirals Club access and free rounds of golf.

And, naturally, these companies aren’t exactly taking out advertisements to let folks know. The notification might have come to you buried at the end of an email or via a small slip of paper enclosed in a bill. So how can you anticipate these changes without reading the fine print?

Apps can be your best friend. Earny automates your credit card’s price protection process and hunts down refunds you might be eligible for. Wallaby tells you which card you should use at specific retailers to maximize your rewards. And Clarity Money allows you to view all your daily transactions and scours your accounts to help you cancel unwanted monthly subscriptions.

Sy Syms, founder of the Syms off-price clothing chain, used to say, “An educated consumer is our best customer.” But today, for credit-card companies, their best customer is the busy consumer who never reads the fine print. Remember, credit-card companies haven’t suddenly become generous. They’re doing what they’ve always done: looking out for themselves.

Author of “Take Back Your Money” and “The Ten Truths of Wealth Creation,” John E. Girouard is a registered principal of Cambridge Investment Research and an investment advisor representative of Capital Investment Advisors in Georgetown.

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