Rewards Devaluation Starting To Dramatically Impact Cardholders

If you’ve ever opened a new rewards card, excited at the possibilities all of those air miles will bring you, then seen the number of miles required to redeem your free tickets go up more than you’d expected, you’ve experienced rewards devaluation. The basic concept is this – the number of miles, or points, needed for your reward increases, making those that you’ve already earned not quite as valuable as you thought they were.

This can occur any time you earn rewards. From the supermarket to the credit card, it’s happening everywhere. In fact, analysts estimate $16 million in rewards go unused every single year, and a big part of that problem is rewards devaluation.

There are currently no regulations on rewards devaluation, so it can happen at any point in time. That is not only frustrating, but it also makes it hard to compare rewards programs as you consider looking for a new card.

Source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/04/17/investopedia6616.DTL