I received an email yesterday from my bank:
As a valued Stupid Bank client, we want you to know about an upcoming change to your Stupid Bank Check Card. The proposed regulations issued by the Federal Reserve will impact the economics of the industry’s check card programs. As a result, Stupid Bank will no longer offer the Stupid Bank Rewards® Program for any Stupid Bank issued check card.
Here’s what to expect:
- Effective April 15, 2011, we will no longer be awarding Stupid Bank Rewards on any check card transactions.
- You can redeem all accumulated Stupid Points on or before December 31, 2011.
- Any unredeemed points will expire effective January 1, 2012.
We apologize for this impact to the reward benefits you’ve enjoyed with your Stupid Bank Check Card.
Point reward programs offered by banks have always been total crap for one simple reason:
You can’t get cold hard cash from points.
To the best of my knowledge there are only two major credit cards that actually offer true cash-back rewards in cash either in the form of a mailed check or as a credit to your balance. But as far as local banks are concerned, uh-uh. Nope. You’ll have to deal with almost-worthless “points”.
Where did reward points start with credit?
You can blame airlines for this one. Many moons ago, someone (who probably got a huge promotion because of this) got the idea of, “Hey, why don’t we offer ‘miles’ as rewards for using our credit cards. We can grant a mile for each dollar spent, and the customer will be suckered into thinking this is wonderful when in fact they have to spent hundreds to thousands of dollars just to get enough miles to be worth using! Brilliant!”
And oh, how the suckers took to this hook, line and sinker – and still do.
What made reward points so awful?
Airlines at least offered something you could actually use, but with banks all they could offer were crappy bank-branded merchandise, such as tote bags and umbrellas.
The awful part comes in when you realized a point is only worth one-half of a cent (and in some instances even less).
Here’s how it worked:
You’re doing your online banking thing, and a pop-up screen appears saying that you can get “FREE” (but not really) stuff if you sign up for the rewards program, and – coolness – they’ll start you off with 500 points.
Well, hey, that sounds good, right? 500 points sounds like a lot. You sign up.
Using a tote bag as an example, you would most likely find this item for sale in any department store for about 10 dollars – but the bank is listing this point reward item with a “cost” of 2,500 points to get it.
500 to 2,500? Doesn’t sound too bad.. right? Wrong.
You “earn” one point for each dollar spent. At this point you’ve been given 500 points. To get to 2,500, you will need to spend $2,000 to get to 2,500 points.
Remember, the tote bag is literally worth 10 dollars; you need to spend $2,000 to get that crappy tote bag.
That means each point is only worth $0.005.
And you thought the value of a dollar was weak. Ha!
It’s a good thing you weren’t shooting for the crappy digital watch, because that thing would have cost you 15,000 points.
Buh-bye, bank reward points. You won’t be missed.
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