Big banks to cancel credit card reward program amid mounting corporate debt



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Big banks to cancel credit card reward program amid mounting corporate debt

Large financial institutions such as Citi Group Inc., American Express Co and JP Morgan Chase & Co. have been seeking to cut back or change some of their credit card reward programs, as credit card users had been getting card-savvier and the corporate debts are mounting, posting one of their biggest debt death-tolls on December, 2018.

According to several spokesman familiar with the matter, the financial institutions had not been actually engaging themselves in to an entire reward-cut scenario, instead, they had been looking forward to find a way to alter their reward policy, in order to boost the credit card usage.

Despite repeated defensive comments from the bank’s spokesmen, the banks were not entirely capable of grappling the corporate debts and there had been chances of gradual rate hike again this year, which probably could sketch an altered financial image.

On a year-over-year basis, costs of the financial organization over the credit card reward programs had grown an average of 15 percent on the third quarter of 2018, a bank analyst, Charles Peabody commented in the report.

Meanwhile, a major revenue stream for the credit cards, the retailer’s fees had been running out of fuel and deduced markedly, on repeated allegation of excessive charges.