"Credit card companies are cutting back on some little-used perks" USA - Article | Credit card reward programs | Discussion forum

Loonie said
I'm sure it's true that most people don't ever use most of the benefits associated with their credit cards here as well. There is a reason for that, of course.

They sometimes change the benefits, insurers and/or or policies without telling you. And, in my experience at least, they never send you the new package of insurance details, which usually have changes in them. You have to sit on the phone for a while to get them to send you updates - if you should think of it. People don't use them for a reason: they are difficult to keep track of, there is too much fine print which essentially negates the policy for practical purposes, and many of the insurance policies are secondary (meaning that you must first claim on your own insurance before you can get any benefit).

In addition, the paper work required to make a claim is typically onerous, requiring documents that people can't find or have thrown out, and adhering to strict deadlines. People learn from their negative experiences.

In other words, the CC companies have created a situation where these benefits aren't very useful, and, lo and behold, people don't use them!

People do use the rewards and do appreciate the no-fee cards because these are tangible benefits that you can keep track of easily and get the benefit from.

From what I've seen, many Canadians, especially those who don't own cars at all and thus do not have any primary insurance, rely on the car rental CLD insurance. Most will never make a claim on it, so the CC issuer may not know if they intentionally "used" it or not.
For a number of years, we rented extensively and this perk saved us from spending thousands of dollars, but we never made a claim. We made sure our card offered primary insurance.

To summarize, I think people do use the perks that work. The ones that aren't being used are the ones that are structured to not work well and are thus no longer a selling feature. Might as well get rid of them.

The question is, would we really see any significant improvements in lieu of what is being dropped? In my opinion, perks have been going down among Canadian credit cards, not improving. Virtually every card (if not every card) has dropped its cashback rate of return in the last few years or they have reconfigured them so that the good rates only apply to the minority of purchases.

It's true that most Canadian reviewers don't really look at the fine print or do a critical evaluation. Some articles are taken directly from US wire services and are next to useless and often misleading. Consider the source!

If AMEX SC dropped all of it's benefits and funneled that to it's cash back. They would likely be able to offer a 1.75 flat card with no fee. Benefits are about 0.5 percent I would imagine.

Look at Walmart. No Benefits. 1%. Compared to most bank cards at 0.5% which usually have some benefits.

AMEX gets a much higher percent, than MC or VISA. If they went flat percent back like Rogers and just got most of their profits from those that carry balances.

They likely could offer a 2% flat CB card with no annual fee.

They do not because they can make way higher profits from taking profits from multiple areas and confusing consumers.

Here is AMEX interchange fees:

https://www.helcim.com/us/american-express/

Didn't know they charge flat 10 cents on transactions on top of the percent.

Anyways, that is what I used to estimate they could offer a 2% card with no fee.