The Consumer Financial Protection Bureau (CFPB) has reported on consumer complaints relating to credit card rewards programmes. Consumers tell the CFPB that rewards are often devalued or denied even after programme terms are met.

Card companies focus marketing efforts on rewards, like cash back and travel, instead of on low interest rates and fees. Consumers who carry revolving balances often pay far more in interest and fees than they get back on rewards. Other complaints relate to card companies using rewards programmes as a “bait and switch”. So, allegedly they bury terms in vague language or fine print and changing rewards after people sign up. New problems have been created by co-brand credit cards where consumers can transfer miles or points to merchants.

“Credit card companies promise upfront benefits for signing up and using their rewards card. But they often bury complex terms in the fine print for using the rewards,” said CFPB Director Rohit Chopra.

“The CFPB will be looking for ways to protect people’s points. To stop bait-and-switch scams and promote a fair and competitive market for credit card rewards.”

Credit card rewards programmes have become increasingly complex in recent years. Especially for credit cards with high annual fees, a key part of attracting consumer interest comes from benefits like getting airline miles or hotel points and access to exclusive lounges and loyalty status that affords premium service or additional perks. Introductory offers have existed since the first rewards cards. But their amount and prevalence has dramatically climbed. Nearly 1-in-10 dollars earned by consumers in rewards are linked to sign-up bonuses.

The CFPB has received a growing number of complaints on how these rewards programmes have been administered.

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