Credit cards rework offers amid travel, restaurant spending drop
A coronavirus-spurred slowdown in travel and restaurant spending has credit card issuers reworking their offerings.
American Express Co. told its Platinum cardholders, who have complained they won’t be able to use their monthly Uber credits for rides, that they can instead use them on Uber’s food-delivery service. The card offers $15 in Uber credits each month, according to the company’s website.
Airlines, hotels and restaurants are among the businesses hit hardest by the Covid-19 pandemic. Governments across the U.S. and around the world are telling people to stay at home and ordering businesses to shutter to stem the spread of the highly contagious illness. In many cities, restaurants are allowed to sell meals only for pickup or delivery.
Brex Inc., the corporate credit card company focused on startups, is allowing customers to shift rewards toward food delivery and remote collaboration tools and away from ride-sharing, travel and restaurants. Since March 16, spending in travel categories is down as much as 63%, while remote collaboration and delivery spending are up 63%, according to a Brex representative.
“In this time of need where you want to get rewards for your spend, companies weren’t getting them anymore,” Henrique Dubugras, Brex’s co-chief executive officer, said in an interview. “We decided to change the rewards program for those who were interested in it to start reflecting what they were actually spending.”
JPMorgan Chase & Co. this week began emailing customers of its popular Sapphire Reserve card -- which offers rewards for airfare, hotels and restaurants -- telling them they’d automatically receive a $100 credit toward their $550 annual fee if their card renews between April 1 and July 1. In January, the company raised the annual fee after adding new perks with partners including Lyft and DoorDash.
Prior to the coronavirus outbreak, card issuers had been scaling back perks in an effort to focus more on profitability and retaining existing customers. Citigroup Inc. discontinued free trip insurance and price-protection guarantees for all of its U.S. cards last year, and American Express Chief Executive Officer Steve Squeri said in December that rewards competition was leveling off.