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In a highly saturated credit card market, providers would throw perks around left and right to entice sign-ups. We all know the main features, like rewards, points, cash back, and miles, but some of the biggest providers, including Discover, DFS, -1.66% Citi, C, +1.56% and Chase, JPM, -1.18% are starting to cut back on the extra cardholder benefits that get low general customer usage, including price protection.
What is price protection?
If you buy something with your credit card, then see the price drop on the exact same item in a given time frame — usually between 30 and 100 days — price protection means your credit card issuer will refund you the difference. Some companies impose caps on how much you can redeem a year, or how many claims a year you can file.
Unlike purchase protection or warranty coverage, customers usually have to manually register the item, file paperwork, or otherwise prove their claim so the credit card company can track the market price. This can be a daunting task for some customers, potentially limiting how often they take advantage of the perk. While it’s definitely worth the effort for some larger purchases like big ticket electronics, customer submission of price protection claims has historically been low.
Why are companies cutting back?
According to a recent report by Marketing Strategies International, extraneous benefits like price protection aren’t really driving value for cardholding customers. Among other conclusions, the report found:
- 80% of cardholders are “unclear” about the benefits of their credit cards.
- 52% off cardholders reported they “know little or nothing” about the extra features.
- Cardholders are looking for no annual fee, cash back, and low interest rates, rather than extra perks like price protection.
In light of these findings and data from the credit card issuers, Chase eliminated price protection entirely while Discover and Citi are starting to cut back, with other major companies soon to follow. Even when card issuers teamed up with tech companies like Earny to offer these services without the in-house cost, the savings still wasn’t enough to financially justify the offering.
Credit card companies would rather focus their efforts and resources on improving the quality and value of the features customers use more frequently.
What this means for your credit card perks
When one door closes, another opens. Credit card companies are cutting back on some little-used perks, but their investment into more popular benefits could be great for cardholders in the long term. For example, Chase eliminated a number of extra features on the United Explorer Card, but replaced them with expanded bonus offerings, Global Entry/TSA PreCheck statement credit, and in-flight discounts, all of which have proven popular with customers.
We’ll likely see credit card companies get more creative with benefits that differentiate the card and attract potential customers. So when it comes time to replace an old card or open a new one, do your research on the best credit card offers in the industry to find benefits that best fit your lifestyle. Once you open a new card, be sure to take full advantage of all the perks available and stay informed as new cardholder benefits roll out.
This article originally appeared on Credit.com.
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