SunTrust Banks Inc. introduced enhanced rewards and bonuses with three new credit cards for customers about seven weeks after the October EMV liability shift, gaining some headwind with the added security of chip cards and an offer of free FICO score reporting.
Even though the rewards upgrade occurs while the bank is reissuing chip cards, SunTrust has taken a good approach in making sure the wow factors of the rewards program stand at the forefront, said Brian Riley, principal executive advisor with CEB TowerGroup.
"SunTrust actually did a lot with these new cards in restacking their portfolio," Riley said. "It is very significant that they have reduced the range of their annual percentage rate at about 400 basis points better."
For the most part, cardholders don't view the EMV chip as a significant value-add. "Cardholders realize chip cards are more secure, but it's really a benefit to the banks and not a selling point to cardholders," Riley said.
However, banks had to inform their cardholders in advance about the new EMV technology and how it works. Some just tried to give card adoption a boost at the same time.
"The only card that really tried to commercialize EMV was a MasterCard that USAA issued about four months ago, touting it as powered with EMV chip technology," Riley said. "It [the marketing] was pulled back a few months later."
Atlanta-based SunTrust now offers SunTrust Cash Rewards, SunTrust Travel Rewards and SunTrust Prime Rewards, placing its emphasis on the value add of the rewards update to its EMV chip-based cards.
In the competitive world of rewards cards, SunTrust is also hoping to stand out because its lower APRs will be part of the card value proposition, not just an introductory APR, said Russell Randolph, senior vice president of bankcard product management at SunTrust.
"The new products help clients more fully address their needs for a safe and convenient way to pay and get rewarded on everyday expenses like gas and groceries," Randolph added.
The SunTrust Cash Rewards card offers 5% back on gas and grocery qualifying purchases made during the first year (up to $6,000 spent), and unlimited 2% back on gas and groceries after the first year.
The travel rewards card provides 5% cash back on eligible travel expenses, including airfare, hotels and car rentals during the first year, and unlimited 3% after the first year, a among other features.
For clients who travel and would like to spend less time in the check-in lines at airports, SunTrust added a $100 credit on the travel card toward global entry/TSA precheck sign-up, Randolph said.
SunTrust Prime Rewards has unlimited 1% cash back, prime rate for three years on balance transfers in the first 60 days of account opening, and no annual fee.
All of the cards offer a cash-back bonus when rewards are redeemed into a SunTrust deposit account, at 10%, 25% or more, depending on the client's deposit relationship with SunTrust.
In adding free FICO scores and continuing to issue chip cards, SunTrust is following a pattern it started in mid 2014, Randolph said.
"SunTrust was one of the first credit card issuers to introduce EMV chip cards in April of 2014, so it was natural for our new suite of credit card products to continue to offer our clients the best security features in the market," Randolph said.
The EMV liability shift took place Oct. 1, 2015, meaning the party not able to handle chip-card transactions became liable for any counterfeit fraud at the point of sale. The change was significant for merchants because prior to the EMV shift, banks absorbed all chargeback costs.
Cardholders are far more interested in the rewards programs their cards offer, rather than who is liable for fraud, Riley said. "That's where you really get the juice, and some players are really aggressive in that arena."
JPMorgan Chase is generally considered one of the most aggressive players in the cards' rewards world. Chase most recently developed a mobile app to help users navigate through and monitor reward redemption at various merchant locations.SunTrust's mobile app allows users to keep track of transaction history and monitor spending as part of overall fraud protection.
Last year, Citigroup bolstered its reputation as an innovative rewards player, expanding its ThankYou rewards points to make online purchases or pay bills through the bank's online bill pay system.In the meantime, Capital One stayed on the rewards radar with a series of TV ads and, most recently, a pact with Uber to sweeten the rewards pot for Capital One cardholders who link their Uber ride payments to their Quicksilver cards.
The success for most major issuers comes when updating their terms or special features on rewards cards and providing card designs that catch consumer attention, Riley added.
"It sounds kind of silly, but it is important to have nice-looking cards," Riley said. "And SunTrust has some really nice cards."