Credit Cards Revive Rewards Battle With New Cash-Back Offerings
(Bloomberg) -- There’s a new battle brewing in the credit-card rewards war, this time over putting cash back in customers’ wallets.
Bank of America Corp. became the latest lender to debut a cash-back offering on Monday, when it unveiled its Unlimited Cash Rewards credit card, offering users 1.5% cash back on all purchases. That follows new products last month from rivals Wells Fargo & Co. and Citigroup Inc.
For years, lenders focused on developing credit cards offering points and miles that could be redeemed for flights or hotel stays. That spawned a cottage industry dedicated to helping consumers get the most out of their rewards.
Then the Covid-19 pandemic hit, giving credit-card customers little opportunity to travel or dine out and limiting their options for using points and miles. Many now want cash-back cards instead.
“We heard from our clients that they want earning rewards on their credit card to be uncomplicated,” Jason Gaughan, credit-card executive at Bank of America, said in a statement.
Wells Fargo kicked off the latest cash-back frenzy last month with the announcement of its Active Cash Card, which offers 2% back on all purchases. Citigroup followed suit days later with its Citi Custom Cash card, which gives customers 5% back on the category they spend the most on in a given month.
“We are investing in our home market,” Citigroup Chief Executive Officer Jane Fraser told analysts on a conference call last month, saying that the debut of the Custom Cash card was “well-received.”
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