These days, most of the nation’s top credit card lenders are being more generous about the way they grant consumers points, miles or cash back, but at the same time, many borrowers are not taking advantage of the rewards they rack up whenever they take on credit card debt.
Experts say that consumers aren’t redeeming points and other rewards cards benefits despite lenders giving more out in recent months, according to a report from Smart Money. This may simply be because they don’t know how their rewards are being tallied and earned, since most major credit card lenders don’t provide an itemized breakdown of how people earn rewards. At most, they typically provide a spending category breakdown, but more commonly, it’s a simple monthly total.
That means, for example, that it can be difficult to determine which purchases earned them the largest amount of cash back or other rewards in the course of a given month, the report said. Many major lenders are now creating tiered rewards systems – those that grant 3 percent bonuses for gasoline purchases, 2 percent for groceries and 1 percent for everything else, etc. – but the lack of full disclosure of how points are earned might not allow consumers to earn as much back as they might have. This can be especially true if only certain types of gasoline or grocery purchases, such as those from certain chains, are incentivized.
Some experts have called for federal lawmakers to address this concern so that consumers can be better informed about the way they earn and can redeem the rewards benefits they earn, but the interest in pursuing rewards account disclosure rules currently seems minimal, the report said. Meanwhile, lenders have argued that if they were to start including the kind of information experts are pushing for, the monthly statement consumers receive would be too cluttered and could obfuscate their ability to understand the document, which runs counter to new federal rules for keeping credit card statements as straightforward as possible.
“There definitely should be more disclosures,” Tim Chen, CEO of consumer credit card information site NerdWallet, told the site.
Consumers should always carefully review their credit card agreements to determine the best ways they will be able to maximize the value they receive for their accounts.