After some of the most beneficial credit card perks have disappeared in recent year, many consumers are left wondering where rewards programs are headed. But while the industry seems to be in the midst of a lull, some experts believe the next best thing in credit cards will be “à la carte” perks and benefits.   If you’ve been playing the credit card rewards game for any period of time, you’ve probably notice that things have changed. We take a look at where the industry is headed.

Why Benefits Aren’t Working Well for Consumers Right Now

  Over the last five years, we’ve seen some of the most lucrative credit card rewards ever announced (such as the Chase Sapphire Reserve 100,000 points bonus) come and go. We’ve seen features like price matching and purchase protection go away, with nothing equally exciting to take its place.   However, the vast majority of consumers choose a credit card for the features —  79% of cardholders admit to using one card over another exclusively because of the benefits, according to a recent study. So when these features begin to disappear or don’t seem to be working as intended, something is amiss.

Many Benefits Go Unnoticed or Unused

You may not even know many of the benefits that your credit cards offer, because you simply don’t need them. But don’t worry: you’re not alone. In fact, there are many consumers who struggle to realize the benefits they’re offered from their credit card products, or to actually utilize them once they do.   Unused or unidentified benefits might include emergency travel insurance, credits for products and services (such as TSA-PreCheck and Global Entry), or even a dedicated concierge desk. If you don’t know that you have these benefits at your fingertips — or honestly, don’t need them — it’s easy to let them go to waste.

Your Benefits Might Not Work for You

When my husband and I signed up for The Platinum Card from American Express, I was so excited to use all of the many benefits included. One of its biggest selling points, though, is a $200 annual airline credit, which can be used toward a number of travel incidentals (luggage fees, in-flight WiFi, food and beverages, or preferred seating).   Unfortunately, we tend to fly Southwest more often than not: an airline that doesn’t charge for bags. While we could probably spend $200 in drinks and Early Bird seating, we chose to fly another airline home for Christmas so we could use the entire credit.   This is just one example of a benefit mismatch. Lucky for us, we are more than able to recoup the Platinum Card’s annual fee in other ways, so I’m not worried if we leave a bit of that airline credit on the table. However, if this credit were a significant factor in us justifying the card’s annual fee, we would have a problem.   Because so many cardholders choose the plastic they keep in their wallets according to the rewards it provides, these discrepancies are likely to be a serious concern for card issuers. After all, if consumers aren’t getting what they need from their credit card, they are going to start looking elsewhere for a product that is a better match.

Benefits Aren’t Really working for Issuers Either, Though

You know all of those amazing (and long-since-expired) introductory offers I mentioned, or the card benefits that recently went away? Well, the reason these are things of the past is that they simply weren’t profitable enough for card issuers.   While I don’t see any of the large card issuers shuttering their windows anytime soon, the truth is that many of their latest efforts have actually failed to boost their bottom line. Additionally, issuers seem to be struggling with retention now more than ever before; whether this is due to the economy or cardholder “travel/points hacking,” there’s no way of telling.   Lastly, issuers have seen a 29% decline in new card applications recently. Sure, they are still making a profit off of finance charges, but this decline in new cardholders may indicate that there isn’t enough being offered to draw fresh customers to the table.   This is why many experts, such as Beverly Harzog of U.S. News & World Report, believe that credit card rewards will soon become à la carte. Rather than being told what sort of benefits you’ll receive, you may soon have the ability to curate a card product that is a great match for your personal spending and redemption habits.

Some Cards Already Allow You to Choose Your Rewards

Of course, a few card issuers have already started allowing consumers a taste of this power.   With the newly-revamped Bank of America Cash Rewards credit card, cardholders are able to choose their 3% cashback category each month. Depending on whether you spend more money on gas, online shopping, dining, travel, drug stores, or home improvement/furnishings, you’re able to pick and choose your biggest cashback category. (You’ll automatically earn 2% back at grocery stores and wholesale clubs and 1% back on everything else.)   The US Bank Cash+ Visa is another card giving consumers a choice. With this card, you can choose a preferred 2% category as well as two categories in which you’ll earn 5% each month. You’ll then earn 1% back on everything else you spend.   The freedom of choice here is limited to cashback categories, of course… but it’s a start.

What the Future Might Hold

As of yet, no card issuers have announced products that would allow consumers to pick and choose their own benefits (outside of those aforementioned bonus cashback categories). However, with many industry experts believing that the ability to customize one’s card features is just around the corner, it may only be a matter of time.   If Bank of America finds great success in their card’s new rewards structure, we can expect to see more issuers following suit. And in issuers’ attempts to become the go-to credit card in consumers’ wallets — giving them benefits they need most and therefore promoting more frequent card use — I predict that next year’s big trend will be the slow introduction of à la carte benefits.   Personally, I’m all for it.   What say you? Would you change anything about your credit card usage habits if you were able to better customize the plastic in your wallet?      With credit card rewards shrinking, we examine the future of credit card rewards, including a la carte benefits. When can consumers expect this?

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via Finance Xpress