A recent study by MagnifyMoney found that travel rewards cards have been growing and becoming more competitive, with introductory bonuses nearly tripling in the last decade. The average initial bonus on a travel rewards credit card is currently 40,556 points—more than double the average bonus in 2008 (16,050 points) and up from 34,327 points five years ago.
MagnifyMoney looked at more than 90 intro bonus point offers from each of the five largest credit card issuers for personal credit cards in five-year increments since 2008. The study did not include offers targeted to consumers via email, direct mail, or site login. According to the results, the number of introductory bonuses offered by hotel-branded reward cards increased from an average of 21,250 in February 2008 to 60,000 in February 2018—higher than the introductory bonuses for airline-branded rewards cards, transferable points, and cash-for-travel points.
The report says that reward offerings help drum up new consumer interest and add to the bottom lines of both travel and card companies. Credit cards use these points and miles to attract new customers with intro bonus offers that allow them to cash in quickly for things like flights and hotel rooms.
For example, Marriott International last December announced new deals with JPMorgan Chase and American Express for Marriott Rewards and Ritz-Carlton Rewards Visa credit cards, and the Starwood Preferred Guest credit cards. Marriott also announced new co-brand products coming later in 2018, including super-premium consumer and small business co-branded products from American Express, and mass consumer and premium consumer co-branded products from JPMorgan Chase. In its 2017 annual earnings release, American Express cited its strategic co-brand agreement with Marriott and its announcement of a suite of new co-brand cards with Hilton as a bright spot during the year.
The study finds that most hotel-branded cards allow travelers to use bonus points for travel or transfer them into airline miles with the hotel’s respective partners, which helps boost miles in a loyalty program to use for things like free flights and seat upgrades. The report says that’s good news for frequent travelers who are finding it more difficult to earn rewards by racking up miles alone. However, these days, 50,000 miles is the new 25,000, says Brian Karimzad, vice president of research at LendingTree, the parent company of MagnifyMoney. “As offers and competition have increased, the bar for going through the trouble of applying for a card has gone up.”
