Credit Cards Rewards Outlook For 2023 – Forbes Advisor

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2022 has been an interesting year, with post-pandemic travel making a comeback, inflation skyrocketing and many credit card issuers offering additional benefits, launching new cards or rebranding existing cards.

Although inflation still appears to be rising and a potential recession is looming, that’s not stopping travelers. Expedia has deemed 2023 to be the year of “unconventional” travel, as people are ready to get out and see the world in all kinds of ways. This means that credit card rewards may be more relevant than ever to cardholders and young travelers.

It’s hard to predict the future with absolute certainty, but these are our best estimates of what credit card rewards will look like in 2023.

Lifestyle Rewards vs. Cash Back vs. Travel Rewards

Back in 2020/21, many cards began offering additional lifestyle rewards as cardholders traveled less frequently, such as increased points for grocery shopping. Some of these disappeared as travel returned, and some stuck.

According to a study by Booking.com, 72% of respondents said that, despite economic and political concerns, travel in 2023 is “still” worthwhile. As people are on the move again, travel rewards cards will continue to be relevant to consumers.

But given the state of the economy, cash back cards may have some value for cash-strapped cardholders. Only time will tell if issuers focus on lifestyle rewards and cash back to make everyday purchases a little easier or focus more on travel rewards such as travel rebounds.

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Flexible Rewards isn’t going anywhere

We live in uncertain times – travel is on the rise, but a potential recession is looming. From one day to the next, frequent flier programs are devaluing miles, so points can be a volatile currency, so credit card rewards may end up being wiped out for a rainy day. .

This is why flexible rewards cards will be very popular in 2023. With so much uncertainty, one thing remains certain: The ability to transfer points to different programs or use them to purchase travel completely through a portal ensures that ensure that credit card rewards points remain valuable. for many types of travelers and spenders, even if or when a particular loyalty program devalues ​​its points.

Credit Card Rewards Like Points and Status Will Become More Valuable Than Ever

As travel costs (and all costs) continue to rise, credit card points become even more valuable, even as programs devalue their point currencies. As good value redemptions become harder to come by, that makes those incredible point redemptions even more elusive but also worthwhile.

As elite status also becomes more difficult to earn due to revamped revenue-oriented loyalty programs (for example, American Airlines finally joined Delta and United in changing their loyalty program, now based on Loyalty Points earn to get elite status), co-. There will be branded and flexible rewards credit cards that offer elite status or help tap cardholders towards an easier and faster path to earning status.

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Big Bonuses

While a possible recession may mean otherwise, we expect even higher bonuses in 2023. In 2021 we saw the Chase Sapphire Preferred® Card offering a 100,000 point bonus. Amazon Secure Card* 100,000 bonus points are also offered in early 2022.

As we wonder if these high bonuses will return in 2023, our crystal ball is not quite sure, but we hope so.

Our top tip for 2023: If you see a solid bonus, jump on it fast. In an uncertain economy, high bonuses may not last long.

More Credit Card Rooms

Lounge access is one of the most lucrative rewards credit cards can offer, and credit card lounge programs are expanding in 2023.

Chase lounges are part of the Priority Pass program, where membership benefits many premium travel rewards cards such as The Platinum Card® from American Express (Terms apply, see rates & fees) and the Chase Sapphire Reserve ®, among others. The Chase Sapphire Lounge with The Club opened in October 2022 in Hong Kong, with many more on the radar for 2023. A representative from Chase told Forbes, “We look forward to opening our first domestic lounges in select airports the next year, including Boston. Logan International Airport, LaGuardia Airport, Philadelphia International Airport and Phoenix Sky Harbor Airport.”

Capital One opened its first lounge in DFW in 2022, with others set to open in Denver and Dulles in 2023. Enter for free with the Amazon Secured Card* and get a discount on the way in with other Capital One cards.

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Better Travel Portals

Credit card companies have recently focused on their own travel portals, aiming to offer easy, manageable experiences for booking travel and redeeming rewards. Capital One launched its travel portal in 2021 and continues to expand. Chase will soon launch ChaseTravel.com, which will be available to all Chase customers.

While using credit card rewards points to book travel through travel portals is not as valuable as transfer points, travel portals offer cardholders additional flexibility and ease, especially for brands that are not transfer partners. reserve.

Possible Government Regulation

With proposed acts like the Credit Card Competition Act of 2022, the legislation could affect credit card rewards. Simply put, this particular action would aim to lower the transaction fees that merchants pay to open the market. If these fees are lower, credit card companies may not have the money to offer customer-friendly rewards such as lucrative bonuses.

Base line

Ultimately, there’s a lot that could happen to credit card rewards in 2023—for better and for worse. Our predictions are based on what we’ve seen in the industry over the past few years, but you never know what might happen.

Our top tips for 2023? Jump on credit card bonuses, get creative with redemptions, take advantage of lounge access and book those trips. Since the future of credit card rewards is always uncertain, don’t sit on those points. Use them!

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