Seeing Double: It’s All About Double Miles

Love them or hate them, you have probably seen Capital One’s TV ads promoting the new Venture card with double miles. The double miles feature initially caused quite a stir in the industry given the pressure on card issuers to cut costs and find additional revenue streams due to new regulations. However, the introduction of Capital One’s Venture may be ushering in a new era in credit cards rewards marketing: one where everything is double.

In August I received an offer for the Capital One Venture card, with double miles, in my mailbox. A week or so later I received a customer communication from my Chase British Airways Visa promoting double miles on “eligible home improvement purchases” between August 18 and October 17. On the same day I received an offer for a Bank of America AAA Visa card that stated “Earn DOUBLE POINTS for every $1 spent on gas for the first 12 billing cycles.”

The AAA double points promotion is not new, but a look at the Comperemedia database confirms that double miles, or double points, have recently been catching on in credit card direct marketing.

In August, Citi began mailing offers for its Diamond Preferred Rewards card with double ThankYou Points, on purchases, for 12 months. Also in August, American Express amended the double points program on its Blue Sky credit card to include all eligible purchases for 12 months (it previously awarded double points on purchases over $500 only). This allows American Express to state on the front of the outer envelope – “2X POINTS ON ALL PURCHASES.”

Double miles is becoming the new battle ground in rewards marketing. One thing you will notice is that all of the other double miles or double points promotions mentioned above either have a time limit or some other restriction. And, yes, we’ve seen triple and even 4x points on some cards but there is always a catch. Capital One currently has an edge on the competition because its miles are unrestricted; however, it is only a matter of time before other issuers are forced to respond to the threat of double miles.

Show Me the Money: The 5% Cash Back War

Since the beginning of the year I have been talking about the “5% cash back” war in credit card marketing. I realize describing it as a war may sound a little dramatic but the head-to-head competition between the Chase Freedom card and the Discover More card has spanned all marketing channels, from direct mail to TV advertising, and covered both acquisition and retention efforts.

In cash back cards, it’s all about 5%. It doesn’t matter whether it’s 5% in select categories or “up to 5%.” For example, Citi’s August re-launch of the Citi Dividend card as a World MasterCard includes a 5% cash back promotion for spend at restaurants, car rentals and hotels from July 1 to September 30. Citi states boldly on the front of the outer envelope, “Plus 5% Cash Back in Popular Categories.”

As competition increases there will be pressure to extend 5% cash back to a broader range of spend categories and lift limited time restrictions. Many issuers won’t be able to keep up with this pace and we are likely to see creative approaches to marketing the headline cash back rate as we move forward.

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