Credit card rewards have become more expensive than ever for big banks, so you may find that some credit card rewards are coming to an end. Here's how else you can earn rewards for everyday spending.

The sky is falling on credit card rewards. At least that’s the assumption based on a recent report by the Wall Street Journal. According to the article, sources told the Journal that executives at some of the biggest credit card issuers are talking about drastically changing their offerings to cut back on losses.

While that sounds terrifying to rewards enthusiasts, reality likely won’t be nearly as bad. Here’s what you need to know and, in case the prophecy comes true, how else you can earn rewards for everyday spending.

Why banks want to cut back on rewards

According to the Wall Street Journal report, credit card issuers have three primary reasons for wanting to reduce the value of their rewards programs:

  • Credit card users are getting savvier
  • A subset of users are gaming the system
  • Retailers are fighting back on merchant fees

Savvier credit card users

For decades, credit card use was largely viewed as an irrational and a somewhat desperate behavior. Only people who couldn’t afford to pay cash would charge a purchase to their credit card.

But as credit card companies have upped their rewards game to entice consumers to use their products more frequently, consumers have begun to seek ways to get as much value out of them as possible.

For example, take the Discover it® Cash Back. The card offers 5% cash back on up to $1,500 spent on rotating categories for every quarter you activate, and 1% back on everything else. If a cardholder earns the base rewards rate on most of their spending, the overall cost to the bank remains relatively low.

But if more and more cardholders use the card only for its bonus categories and switches to a card that offers more than 1% cash back for everything else, the cost per account may become unsustainable.

Gamers and sign-up bonuses

The Journal article also mentions cardholders who “game” the system, specifically by opening credit cards, getting the sign-up bonus, then sticking the card in a sock drawer and never using it again.

Credit card issuers provide big sign-up bonuses, especially on their travel credit cards, to get consumers to sign up. But if more and more cardholders take the bonus and run, the banks don’t have a chance to recoup their acquisition costs.

Retailers and merchant fees

Credit card companies make money primarily in three ways: interest, account fees, and merchant fees. Even when a savvy credit card user manages to avoid paying interest on a no annual fee credit card, the card’s issuer still makes money off of merchant fees.

But merchants are tired of paying the fees set by payment networks like Visa and Mastercard, and many have resorted to lawsuits to try to get them changed. If they succeed, the costs of the rewards programs banks offer today may become too expensive.

Why this story may be more bark than bite

There are certainly some reasonable arguments made in the Wall Street Journal piece, but the actual future of credit card rewards may still be bright, and here’s why.

The averages don’t tell the whole story

According to the report, sign-up bonuses have dropped, on average, from 66,000 points in 2016 to 58,000 points in 2017, then down to 44,000 points in the first seven months of 2018. While that looks bad on the surface, it may be a little misleading.

That’s because some credit cards, including the Barclaycard Arrival Plus® World Elite Mastercard®, offered their highest sign-up bonuses ever in 2018.

Also, credit card issuers often do limited-time offers and send out pre-approval letters with higher offers than what’s publicly available. In short, the averages the Journal used may not include all of the relevant information.

On the whole, credit card users aren’t much savvier

According to the American Banker’s Association, 43.8% of credit card holders carried a balance from month to month and paid interest in the second quarter of 2018, compared with 42.5% in 2016.

In other words, while smart credit card users are getting more attention, more people are paying interest on their credit cards, not fewer.

Some perks were too good to be true

One of the examples of cutting back the Wall Street Journal shared was the Citi Prestige® Card’s hotel benefit. Essentially, cardholders who booked a hotel stay of at least four nights with the card, the fourth night was on Citi.

Because there was no cap on this perk, many frequent travelers snagged thousands of dollars worth of free nights a year.

In other words, the benefit wasn’t meant to last, and it certainly can’t be compared to more common perks like travel protections and airport lounge access.

If credit card companies do start feeling a squeeze with their rewards programs, it’s likely that these overly generous benefits will be the first to go.

Banks will have a hard time getting customers to go along

Early in 2018, Barclays launched the Barclays Arrival Premier® World Elite Mastercard®. Instead of offering an upfront sign-up bonus, the card sought to reward loyalty, giving cardholders an annual bonus based on spending instead.

It was a risk for the big bank, and it didn’t pan out. By October, Barclays pulled the card from the market because consumers simply weren’t interested, especially when they could get more upfront value just about anywhere else.

It’s likely that consumers would do the same with any other similar attempt.

Banks need to stay competitive

According to the 2018 Federal Reserve Payments Study, credit card payments increased by 10% from 2016 to 2017, and there was a 7.4% increase the year before that.

If the trend continues, credit card companies will need to continue to stay competitive to avoid losing market share. If banks start to devalue their credit card products significantly, cardholders will flock to the alternatives.

Other ways to earn rewards on everyday spending

Whether or not credit card rewards programs start losing value, it’s a good idea to know how you can earn cash back, points or miles in other ways. Here are our top options:

Cash-back websites

Websites like SwagbucksEbates, and Topcashback allow shoppers to get money back at thousands of online and brick-and-mortar retailers.

Simply visit the cash-back site and search for a specific retailer. Then click through to the retailer’s website, and the cash-back site will track your visit and how much you spend. Depending on the cash-back website and retailer, you could get upwards of 10% back.

Airline and hotel shopping portals

Much like cash-back websites, these shopping portals allow you to earn points or miles with your favorite hotel or airline instead of cash back.

Store credit cards

When it comes to credit card rewards, store credit cards generally don’t compete with major credit cards. Some retailers offer great rewards on their credit cards, and you can likely still expect to get those great rewards regardless of what happens with the big banks.

Spare change apps

Spare changing investing apps like Acorns and Stash allow you to link your credit or debit card to your account.


Every time you make a purchase, Acorns can automatically round the transaction up to the nearest dollar and invest the difference. 

While you’re not necessarily getting value in the same way as you do credit card rewards, the roundup amounts can add up over time and also grow with the market. 

Sign-up with Acorns today or read our full review.


Stash is an investing app that aims to give young people more choice in their portfolio. Stash lets you invest with just 1 cent.¹ You can choose your portfolios based on your goals, values, or companies that you believe in. And there are roughly  1,800 single stocks and ETFs² to choose from. So lots of choice.

Stash’s application process is quick and simple, but know that you do have to give personal information like your social security number and bank information.

Sign-up with Stash today or read our full review.

*Terms and conditions apply


Credit card rewards have become more expensive than ever for big banks, but they’re also driving a lot of customer acquisition and card usage. Because of this relationship, a significant pullback in rewards programs is unlikely—at least not in the near future.

That said, it’s always a good idea to learn how you can maximize the value you get whenever you shop, so take advantage of available programs to continue earning as much as possible, regardless of the discussions that are outside of your control.

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*Terms and conditions apply – Stash legal disclosures

This material is not intended as investment advice and is not meant to suggest that any securities are suitable investments for any particular investor. Investment advice is only provided to Stash customers. All investments are subject to risk and may lose value.

¹For Securities priced over $1,000, purchase of fractional shares starts at $0.05.

²Before investing in any exchange-traded fund, consider your investment objectives, risks, charges, and expenses.

Money Under 30 is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser.


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About the author

Total Articles: 17
Ben Luthi is a personal finance and travel writer who covers credit cards, debt, credit, investing, and more. He's currently studying to become a CFP® and trying to keep up with his two young kids. You can connect with Ben on Twitter or his website.