This week I had three interactions with three banks and it became clear that Chase knows how to motivate me because Chase knows how rewards programs work, why is it so hard for everyone else?
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It’s Not Just Credit Cards
My relationship with banks, like other consumers, is not limited to credit cards. I am a mortgage owner (I don’t say homeowner because the bank owns it), I have checking accounts, investment accounts, savings accounts, and while I don’t have any at the moment, I like to get CDs from time-to-time.
Some banks have great credit card programs but don’t extend this to other areas of their customer’s financial lives. Checking accounts are one area where I see this often. BankDirect (which I left) offers an American Airlines Mileage earning checking account as did Sun Trust with Delta. Citi, who have both their own currency (Thank You Points) and a long-standing relationship with American Airlines (among others) offer targeted bonuses but put credit card type rules in place to limit abuse and participation.
Most banks are not using their relationships to their fullest. Bank of America once offered Alaska Airlines miles for a new checking account but don’t do so anymore. Other banks don’t seem to utilize their reward points as sweeping as Chase has with Ultimate Rewards.
Total View of the Customer
Chase has been so good for our credit card experience that we moved other aspects of our financial lives to the bank. We have had a number of banks that could have competed for a larger piece of our business, only Chase has really sought it out. Our previous mortgage holder offered no incentives (despite us reaching out to them) to win our next mortgage. As a result, we left them completely for Chase.
By building a deeper relationship with us and making aspects of a greater relationship aspirational (like Private Client) we gave them an opportunity before other banks. The bank matched a competing mortgage interest rate (after some pushing) but we ultimately chose them because of an Ultimate Rewards bonus and also because it is easier to keep everything in one place.
By selecting the levers that have driven our past behavior, they have found a way to drive our current and future behavior.
Imperfect but Better
For some customers, Ultimate Rewards points (though they can be c0nverted into these currencies) might not draw customers the same way 75,000 United miles or Hyatt points might. I’d argue that depending on how they transfer into a traveler’s account, 75,000 well-timed Southwest Rapid Rewards points could be worth far more if they put participants within striking range of Companion Pass.
Others Just Don’t Understand
Citi is perhaps the worst at using intelligence to market to their customers in my experience. Citi doesn’t engage me in offers for which I am eligible. Barclays sends me offers for higher than average transfer fees and very poor spending bonuses. They don’t engage me and haven’t earned my business.
American Express offers me a personal loan at just under 8% for up to $25,000 every single time I log in, but I will never take it – why? Because every other bank sends me checks that offer 0% for 12-24 month and between 1-3% transfer fee. American Express knows what is competitive and they clearly don’t want my business as bad as others. I have taken that offer up with other banks from time to time, it can make sense around big purchases (you make X amount of points but pay over time for 1% charge.)
Chase isn’t perfect, but they do a better job than any of the others at driving customer behavior and rewarding customers for doing business across their portfolio. We could be missing out on great service with Citi, Bank of America, or others but without giving us a reason/incentive to do business with them, we won’t find out.
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Couldn’t agree with you more. Very impressed by Chase and wouldn’t hesitate to give them more business.
Citi does really dumb things like not give you a bonus when you decide to get another card less than two years apart. Why penalize a customer that wants to do more business with you. I use both cards because they have distinct benefits. Bizarre logic.
But I feel that Capital One is the worst bank of the lot. At one point I was using my cards a bit more actively for business growth expenses. Always pay my cards on time and generally don’t carry much of a balance. Capital One was the only bank that jacked up my rate, Paid off the CapOne card in full within a few months and cancelled the card. Customers have long memories especially if one feels taken advantage of.
Completely off base. Chase does the same thing with their sapphire cards but now you can’t get a bonus if you have a card opened or closed within the last two years which means 48 months between cards. Too many people open and close cards just for the bonus and this is not making the bank money,
Citi regularly sends out 0% balance transfer offers (fees depending on the card ranging from 3-5%) just like chase. I have 4 citi cards so I get a lot of offers. I also had 4 chase cards (3 now) and get the same amount as citi.
Bank of America is the bank that really is great at providing rewards for linked accounts with checking, investment products and credit cards through the premium rewards based on checking, savings and investment account balances,
In my experience chase is great for credit cards and not their other banking products. If you have a checking or savings account they are always very pushy in branches offering their products. I never have had that off putting experience at citi or Bank of America.
John – Just a couple of clarifications, though you’re entitled to your opinion. Your Citi offer of 0% with 3-5% transfer fee is worse than the one I mentioned with Capital One (0% for 18 months with 1-2% transfer fee.) Chase isn’t far off that at 0% for 20 months with 2% transfer fee, but it Citi isn’t close. It’s possible we are getting different offers, however.
If you’d like to include some references to the Bank of America offers, I would be happy to discover them for myself and for our readers. I haven’t found that. In regards to offers in Chase branches, again that’s not been my experience.
Nice article… But, there is now way on God’s green earth Chase matched a competive mortgage rate. Ya got had. Next time, PM me and I’ll find you a real rate. And, I am not a mortgage broker. Computer nerd.
Otherwise, I kind of like Chase as well. Private client absolutely not worth tying up money there.
Sammy – I appreciate the comments but I must correct you on the rate. I shopped it with a number of lenders, found the best, moved toward Chase, another lender came back with a better offer, the best I was able to find on the internet and Chase matched it. I had to provide documentation of the competing offer, but they did, in fact, match it.
Interesting topic. My experience with Citi, or recent experience at least, has been better than yours. With the new 5x earnings rates on the prestige in my heaviest spend categories (travel and dining) and a recent offer to get 25% extra points each month when I opened checking and savings accounts, Amex/Chase can’t really compete.
Amex offers and the ebates connection keep me engaged to an extent but Chase has lost me a bit after being my go-to bank for the last few years (though I still keep it as my main checking account with them.) My lack of a mortgage or interest in a balance transfer has perhaps skewed my experience.
amex is better. Chase literally copied their rewards program just to TRY to keep up.
@Dick – Chase might have emulated AMEX’s initial program, but their products are better for everyday spending without a doubt. Without deep diving into those two credit card products, this post is about the broader relationship. Do you have an example of how they offer better ways to connect with the bank by offering Membership Rewards points for checking, savings, mortgages, investment products or similar? I don’t.