Credit Card Companies Are Tightening Reward Policies

I remember few years back, the companies were giving the credit card like anything. And that too, the rewards were quite good. One of the major reward was free lounge access. And because of that everyone started getting the free Credit Card with lounge access. And because of that the Credit Card companies were started losing money.

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And then the tightening of reward policies have started. So the companies have literally stopped giving lounge access to the free card instead you have to spend some amount every month or quarter to get the lounge access. And then along with that a lot of devaluation of the rewards also happens. For example, recently the Amex Travel card has been devalued from 8% rewards to just 5% rewards.

And it is not only for the single Credit Card, it is happening across all the credit card companies. These companies provide a good credit card for free to attract customers and then when more and more people started using it, the companies reduces the rewards. Because of this people are taking multiple cards because one card doesn't have good rewards now a days. And that's why having multiple cards are beneficial.

So even though the rewards are reduced, I still feel that having credit card is better. You get rewards for your everyday expense and along with that you will get emergency fund money when you need it. For example, if your yearly expense is 1 lakh and you have a SBI Cashback card you can easily get 3 to 4K back as rewards which is a good option.