Credit Card Loyality Doesn't Pay
It's kind of weird & bizarre. But despite all the hype and verbal praise that credit card companies pay to customer loyalty. It just doesn't pay!
A couple of years ago, a major financial institution mailed a travel reward credit card application to me with the incentive of 10,000 flyer miles from a major airline. It was lucrative enough for me to accept the offer. However I already had 4 credit cards. This one soon fell into limbo. After almost a year of neglect, I finally decided to cancel the account to avoid the possibility of identity theft.
I dialed their 1800 number. After waiting several minutes, a customer service representative, probably located across the Pacific Ocean, answered my call with a slight accent. I told him about my decision to close the account. He politely listened and mentioned if I'd be willing to talk with an associate of his. I said fine. He put me on hold for a minute. And then another guy, this time with almost no accent came on the phone, and greeted me like to like a long lost relative. I always get suspicious when people are overly nice to me. But I decided to listen. He said that he understood my situation, and asked me if another 5000 points would change my mind. I was a bit surprised. He was rewarding me for being disloyal! I decided to play it cool, and mentioned that all of my other credit cards don't have any annual fee. He made me another offer, "Would you stay on if we waived that?" Sensing a bit of flexibility, I said that I could use more miles. Unfortunately, he didn't budge much further, and only gave a couple thousand more miles.
I accepted the offer, and left feeling kind of giddy. Already my head was plotting on what else I could get next time. About half a year later, I again called their customer service, and requested to cancel my card. Surprising they processed my request. I was feeling a bit down as the conversation came to a finsih. However at the last instance, the representative asked whether I have a business. I said, "Yes…" in a cautious tone. The rep then mentioned about a small business credit card reward program where they'd reward 25,000 miles for signing up. After failing to get it to 35K, I finally said, "let's do it."
Looking back at my experience, I earned about 500 miles through my normal "loyal" usage, and yet was rewarded 32,000 flyer miles for being disloyal. When the year is over, you can bet that I will cancel my card and get a new one. I'd probably only do it once a year to minimize the impact to my credit score. And I will always keep a couple of cards to demonstrate my credit history. But the lesson is clear. Credit card companies definitely do not reward loyalty!
Check out these links to get you started on the latest Travel Credit Cards from MBNA in UK.
