CFPB report highlights consumer dissatisfaction with credit card rewards programs


Washington DC – The Consumer Financial Protection Bureau (CFPB) released a new report finding that consumers are experiencing numerous problems with credit card rewards programs. Consumers told the CFPB that rewards are often devalued or denied even if program terms are met. Credit card companies focus their marketing efforts on rewards, such as cash back and travel, rather than low interest rates and fees. Consumers who hold revolving balances often pay much more in interest and fees than they earn in rewards. Credit card companies often use rewards programs as a “bait and switch,” hiding the terms in vague language or fine print and changing the value of the rewards after people sign up and receive them. The growth of co-branded credit cards and rewards programs, which allow consumers to transfer miles or points to merchants, has created new issues.

“Credit card companies promise upfront savings for signing up and using rewards cards, but often hide complex terms in the fine print for using rewards,” said CFPB Director Rohit Chopra. “The CFPB will look for ways to protect people’s points and stop bait-and-switch scams. , and promote a fair and competitive market for credit card rewards.”

Credit card rewards programs have become increasingly sophisticated in recent years. Particularly for credit cards with higher annual fees, a key part of attracting consumer interest comes from benefits such as earning airline miles or hotel points, access to exclusive lounges and loyalty status that offers premium service or perks. Introductory offers have been around since the first rewards cards, but their volume and popularity have grown dramatically. Nearly one-tenth of the rewards consumers earn are tied to sign-up bonuses.

The CFPB has received a growing number of complaints about the way these incentive programs are administered. As mentioned in today's report, consumers are experiencing a number of problems using these programs, including:

  • Credit card issuers impose vague or hidden conditions that prevent consumers from receiving rewards: Consumers say the requirements detailed in the bonus program terms and conditions are inconsistent with marketing materials, turning sign-up offers or other promotional incentives into a “bait and switch.”
  • Company depreciation reward: Consumers mentioned that card issuers and merchant partners reduce the value of earned rewards by increasing the number of points or miles required for redemption. Consumers have also observed that card issuers do not protect them from rewards program partners’ decisions to remove rewards program benefits or requests to increase earned status.
  • Consumers encounter redemption issues while earning benefits: Consumers described customer service issues and technical glitches that hindered or delayed redemptions, preventing rewards from being easily transferred to third-party merchants. Card issuers often redirect cardholders to partners and are unable to reinstate rewards when consumers are unable to redeem them through no fault of their own.
  • The company revokes previously received rewards: When an account is closed, consumers indicate that their points, cash back, and miles disappear. Consumers also described financial institutions revoking rewards for open and active accounts through expiration policies, which was often done without prior communication.

Federal consumer protection laws apply to rewards programs related to consumer financial products or services. The CFPB has taken action against credit card issuers such as American Express and Bank of America, alleging unfair, deceptive or abusive acts or practices with respect to their rewards programs. The CFPB will continue to monitor credit card rewards programs and will take necessary actions regarding these issues, as appropriate.

reading report, credit card rewards.

Consumers can submit complaints about financial products or services by visiting the CFPB website or calling (855) 411-CFPB (2372).

Employees who believe their company has violated federal consumer financial laws are encouraged to send any information they know to whistleblower@cfpb.gov.


The Consumer Financial Protection Bureau is a 21st century agency charged with enforcing and enforcing federal consumer financial laws and ensuring fair, transparent, and competitive markets for consumer financial products.For more information, please visit www.consumerfinance.gov.



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