Bye-Bye, Rebate - credit card rebate programs - Brief Article

Kiplinger's Personal Finance Magazine, Nov, 1999 by Joan Goldwasser

CREDIT CARD issuers are dumping rebate programs as frantically as homeowners discard autumn leaves. The latest casualty: the (too) popular Giant Food Visa card. The Mid Atlantic supermarket chain started its money-back program in 1996 with an M&T Bank Visa card that offered a rebate of 3% on grocery purchases and 1% on other charges.

That sweet deal ended in 1997 when M&T pulled out, reportedly because it was losing $1 million a month on the program. Bob McKinley, CEO of CardWeb.com, a credit-card-tracking company, says savvy shoppers were charging far more than expected--and ringing up bigger rebates--and most were paying off balances in full each month to avoid interest charges.

Chevy Chase Bank, which took over and cut the rebate to 1% on all purchases, passed it off to First USA last December. Now, First USA has pulled the plug.

Cardholders who are losing the perk should check out American Express's nofee platinum cash-rebate card. It bestows a tiered rebate of up to 1.5% if you pay off your balance in full. If you carry a balance, the rebate ranges up to 2%.