Credit Cards

Rewards Credit Card Marketing Gets Closer Look

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Today, many of the nation’s largest credit card lenders are increasing the value of their various offers, including on rewards cards. However, an independent advertising body recently ruled that one may have misled consumers with regard to how valuable one such offer was.

Bank of America recently rolled out its 1-2-3 Cash Rewards Credit Card, which promised users 1 percent cash back on all purchases as a baseline, with 2 percent back for grocery purchases and 3 percent back for gas transactions. However, JPMorgan Chase recently brought a claim before the Advertising Self-Regulatory Council saying that its competitor unfairly marketed the product in a way that may have misinformed potential borrowers.

At issue was the fact that the 2- and 3-percent cash-back offers were subject to a $1,500 quarterly limit, meaning that for those who spent more than that amount in these categories every three months, the double and triple rewards no longer applied, the report said. As such, Chase claimed the ability of consumers to earn rewards on the card was overstated.

For its part, Bank of America said that the $1,500 cap is becoming industry standard, as Discover and even Chase, which brought the complaint, have similar limits in place, the report said. However, the lender also changed the way in which it advertised the 1-2-3 Cash Rewards card while the National Advertising Division mulled the case.

The NAD’s final recommendation was that Bank of America disclose in its advertising that the $1,500 rewards cap exists in a more conspicuous manner, the report said. Bank of America disagreed with the conclusion, and because the NAD’s decision is non-binding, it was not technically required to take further action. Part of the reason for this is that its disclosure of the limit in television ads met network guidelines and remained on-screen whenever the rewards were being discussed throughout the commercial. However, it did state that it will take the organization’s verdict into account when producing advertising in the future.

It’s important that consumers always take the time to closely review any credit card application they want to fill out so they are fully prepared for all aspects of the agreement over the life of the card.

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