Don’t Let Your Credit Card Take Advantage of You Like Mine Did

by on April 23, 2012

Like most people, I have several credit cards that I use for different purposes.

A Target card that saves 5% on all purchases from Target.  A Costco AMEX card saves at Costco and restaurants.  A Citibank card that I use when they don’t take AMEX.  And, the card I’ve been using for years, the Blue Card from American Express.

For as long as I can remember I’ve been getting one point per dollar spent with the Blue Card.  Every 10,000 points is worth $100 in gift cards, so I’ve been pooling all of the purchases onto this card over the years so that I can save up and get several hundred dollars towards gift cards such as Best Buy or Home Depot.  It’s worked pretty good.

Don't Let Your Credit Card Take Advantage of YouAfter all, American Express charges merchants nearly twice what Visa and Mastercard charge, so American Express can easily afford to give better rewards than other cards, right?

Well, all that changed today!  I got an email promoting 20% off any rewards redemptions, so I went to get some gift cards.  Unbelievably, the points needed to get a reward have doubled!

I don’t know when this happened, but I know for sure that I was not given a head’s up by American Express that my point values were going to drop in half.  I’m sure it was in some fine print somewhere, but if you ask me, I was taken advantage of by my credit card.  No email, no notifications in my rewards account, no legitimate way to let me even know when it happened.

If someone tells you that your points are worth a certain dollar amount, and then, after you accumulate the points, drop the value in half, that is the same as a classic bait and switch scheme to me.  It makes me really mad, as I had 30,000 points and I feel like I just lost $150.  If I had known, I could have used one of my other cards that has a much better payout.

Of course, I can understand why the credit cards need to protect themselves.  With the idiotic legislators trying to write laws that interfere with free trade, the credit card companies are forced to find different people to rip off.  Now, they apparently take advantage of all customers, not just the one’s that miss payments.

The takeaway from all of this. Try not to let your credit cards do the same thing.  Maybe it’s smarter to spend your reward points as fast as you can so that at least if it does happen you won’t have that many points to get devalued.  Also, if I would have caught this earlier, I could have switched my spending to a different credit card sooner.  That’s what I’m going to do from this point on.

Screw you American Express!  And screw all you credit card companies that take advantage of people!

{ 18 comments… read them below or add one }

Nicolasa Weatherman April 24, 2012 at 9:10 pm

Both banks and credit card companies will try to get away with what they can and have been taking advantage of people for decades which is legislation is needed. This hasn’t just happened in the last few years. I’d call and speak with a manager and insist on a resolution.

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Preb May 20, 2012 at 6:10 pm

The same thing happened with me. I used to have a Gold card, earned about 50,000 miles with it. Redeemed 25,000 of those. At some point I decided I didn’t need a gold card and switched to a blue card. Shortly after I went to redeem my points and was told that they are now “express” points which are worth less because I’m not a Gold card holder any more. American Express used to be a card company that didn’t trick it’s customers but clearly that has changed.

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Credit Cards June 19, 2012 at 12:06 pm

It is very difficult to have a credit card and not to spend money while shopping. When i got my first credit card i did not used it for more than one year. But later when i started to do online shopping then i got to know how powerful and if not controlled how problemsome the credit cards are.
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Kendy June 24, 2012 at 10:43 pm

Credit card company schemes are sometimes hard to analyze. They use too deep flowery words that will attract people to use the card at all times in exchange of redeemable points. Nasty scheme if you ask me. But the blue card seems legit and works great on you Chris.
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catalogues May 19, 2013 at 9:14 pm

If you open a card to do a 0% balance transfer, do not use the new card for purchases. This is because many of the companies allocate repayments to the cheapest debt first, so your repayments will have to clear any balances on which they charge the lowest rate before they?re allocated to the items on which they charge higher interest. Even if the offer is 0% for 12 months for balance transfers and 0% for 3 months for purchases, don?t use it for purchases. Get a different card for ongoing purchases.

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Peter July 5, 2012 at 4:43 am

Interest rate hikes on existing balances are allowed only under limited conditions, such as when a promotional rate ends, there is a variable rate or if the cardholder makes a late payment. Interest rates on new transactions can increase only after the first year.

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FIA Net Access July 25, 2012 at 6:57 am

Credit card holders should be very careful on spending using their card. Yes there is a lot of perks, points, discounts but above all that there is a nasty scheme from credit card companies. And most of all without further notice your accumulated points are now cut into half that you’re saving to redeemed in the future. How greedy is that!

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Joe Farrington September 3, 2012 at 9:00 am

American Express is not liked also by merchants, because of too high royalties are taken from them. Therefore they don´t accept it gladly.

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CNCC May 4, 2013 at 8:10 pm

In the United States, the debt levels of Americans have continued to increase since the 1980s. It was during this time that the use of credit cards greatly increased. Credit cards companies begin looking for different ways to market their products to consumers, and used such things as direct mail, commercials, and other marketing tactics.

It was during the 1980s that consumers begin moving away from cash and checks into credit cards. The cause of this is often attributed to the start of the information age. As the use of computers became more widespread, credit cards quickly followed. It is estimated that the number of people using credit cards during this time surpassed those who were using checks and cash in a single year. The use of debit cards has grown tremendously since this time as well.

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andrew wilson May 14, 2013 at 6:32 am

read your experience.feels so sad. i will be more careful from now onwards.we have to be careful while doing transaction through credit cards though it should be offline or online.

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Shrey June 3, 2013 at 4:05 am

Hi Chris,

As the use of computers became more widespread, credit cards quickly followed. It is estimated that the number of people using credit cards. Credit card company schemes are sometimes so sticky that will attract people to use the card at all times in exchange of redeemable points.

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AKMA.my September 4, 2013 at 12:05 am

Ooo .. I do not know , I use Amex Cards very long time , even in Malaysia interest rate for amex the highest from others . I’m not sure if this also happens in my country , but amex is worldwide..i think the scheme is same…feel sad read your experience.
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Vasiliki Karakatsanidis September 5, 2013 at 9:13 am

What an article! Well, for long time now I have stopped using credit cards, for all reasons you
people mentioned above.I am grateful that I searched and found a wonderful program to get
money back from my purchases.It works for me because it’s simple,NO CREDIT CARDS,FEES
MONTHLY PAYMENTS or other attachments.I can hear you saying that you know this scenario
because I said the same thing .Surprise,surprise, it isn’t so. Focus on ways you can save money
and at the same time make some too.Give your financial goals a direction, get motivated and stick to it.We make everything that happens to us complicated because we have no patience to search for simple things that make our lives easy.This is what’s happening to all of us.Let’s break this habit!
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Jason Harrison October 9, 2013 at 2:46 pm

Hi Chris,
this is pretty bad what the credit card company did to you. I feel like there are hundreds of people out there that feel the same way. It’s a shame that the company expects you to buy thousands of dollars worth of stuff for you to get the full potential and savings of a credit card. I feel the same way that you do with some credit card companies. Thanks for telling me more about the dangers of credit card companies,
Jason Harrison
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Spencer November 20, 2013 at 8:26 pm

Hi Chris.
That sounds awful. I’m sure there were many more people that were saving their points and feel exactly like you did. Even if it was in the fine print, that still seems like an awful thing for a company to do to it’s customers.
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Chris March 19, 2014 at 11:13 pm

That’s a real pain. The key is to use your points as quickly as possible. Difficult I know if you’re saving for something, but there’s a risk, as you now know, of the points disappearing or reducing in value…
Chris recently posted..Business Credit Cards with RewardsMy Profile

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Adam April 15, 2014 at 10:20 pm

Wow! I’ve never had that happen. I don’t use American Express either though. I wouldn’t put it past other banks and card issuers to do the same thing though, so I’ll be checking up on them regularly just to make sure I don’t fall into the same trap.
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Sri Katyayani April 26, 2014 at 6:34 am

it is great article, I have good and bad experiences with credit cards, in India, the rules are very stringent, if we dont pay the amount the card company sends their agents to home, offices hence i stopped using the card, to avoid problems.

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