Credit cards issuers cutting benefits

Have you been reading "update" notices that are being sent out by your credit card issuers this summer? If not, you may be in for a surprise this fall when some popular benefits disappear from credit cards.

For example, collision damage waiver, and half a dozen other travel and purchase benefits including 2-5 percent back in points at Sears and Kmart will be removed from the Sears platinum MasterCard issued by Citi as of Oct. 1. 

Bank of America is eliminating five benefits on its Better Balance Rewards MasterCards as of Nov. 1. And Discover, as of last month, removed from its cards benefits for lost or delayed luggage, travel insurance, and emergency roadside service.

"Credit card issuers have used a host of benefits to attract customers to their cards, but now they are quietly removing many of them," said Consumer World founder Edgar Dworsky. "Some customers may be in for quite a surprise when they go to use one of these benefits but only then discover that it no longer exists."

Most of the MasterCard changes were made by the card company in January for their standard, gold, and platinum cards, but the cuts are only being carried out now by some banks.

MasterCard said it evaluated which benefits cardholders preferred and put to use for everyday transactions in deciding what set of core benefits to offer and which to drop, Dworsky said. For basic cards, the new core benefits funded by MasterCard include extended warranty, price protection, identify theft resolution, and lost card services.

Individual banks can supplement the core benefits with other benefits, or buy back deleted ones.

A Visa spokesperson said it had no plans to reduce benefits on its cards, he said, while AMEX didn’t respond to inquiries.

At the same time they’re reducing benefits, some of the card issuers say they’re adding or improving some benefits. For example, FIA Card Services, a unit of Bank of America that issues credit cards for Fidelity Investments, is expanding its "extended warranty" benefit on certain cards. Starting in November, it will double a manufacturer's warranty up to two additional years – up from one year – for warranties of 24 months or less.

Sears MasterCard said that as of Oct. 1 it’s improving "extended warranty" and "price protection" on its platinum cards, but spokespersons at MasterCard and Citi couldn’t provide details on enhancements, Dworsky said. 


Credit Card Benefits Changes Summer/Fall 2015