Pay Yourself Back Devaluation
Chase is feeling it right now. The bank’s on quite a heater, just hammering the reliable value cardmembers could historically find with the Ultimate Rewards program. Hyatt people have gotten it the worst lately, especially when taking into account the decimation of the chain’s loyalty program. But Chase just can’t give it a rest. The bank has now moved forward with a Pay Yourself Back devaluation, my sole Ultimate Rewards redemption method. Let’s take a look at the change and also a Pay Yourself Back wrinkle that continues to this day (until it doesn’t).
Of Course There’s a Pay Yourself Back Devaluation
As a longtime cashout fan of Chase Ultimate Rewards and other bank points, I woke up on this first day of the quarter and checked Chase’s refreshed list of participating Pay Yourself Back categories for the Sapphire Reserve personal card. Bleery-eyed, with coffee in one hand and phone in the other, I had to read through the info twice:
First off, Chase removed grocery stores and pet stores/vet bills as categories at the 1.25 cents per point level. Second, public transit and gas stations have been added at 1.25 cents per point wait, what? Chase added these categories at a value of 1.2 cents per point. Personal Sapphire Reserve cardholders only obtain 20% more value now, rather than 25%, which had been the general rate for years (and down from the 50% at Pay Yourself Back’s inception).
Otherwise, Chase is keeping select charities at 50% and membership fee at 25% more value, respectively. Perhaps Chase is expecting kudos for keeping these the same, similar to maintaining Sapphire Preferred’s annual fee at $95. Bleh.
My Initial Take
I haven’t actually felt a Chase devaluation since the first time the bank tweaked rotating Pay Yourself Back categories from 50% to 25% extra value. This latest devaluation is a much slimmer cut. But Chase’s signal here is just as profound as the first, and perhaps more. With this change, Chase is determined to decrease the everyday PYB value members obtain from a card they pay $795 for.
Again, it’s just a slight change. But Chase comes off as cheap, petty, maybe even making this move out of desperation. That 5% of extra value Chase has taken away might save them a bit, but at the cost of perhaps driving some customers away. The bank apparently needs that extra bit of money really badly. Chase doesn’t seem interested in goodwill toward customers, if they ever were. That’s the bank’s prerogative as a business, of course.
That said, Chase knows many will keep doing what they already were, albeit for less value. Indeed, I am. It’s an easy decision, as I was cashing out Ultimate Rewards points for a penny each in the pre-PYB days. Obtaining 1.2 cents per point is still substantially better. I guess only slashing the rate to 1.2 is a good thing, rather than getting rid of PYB altogether? Perceiving that as good news is just another sign of how backwards and bad things have gotten with Chase.
Another Pay Yourself Back Wrinkle
While taking in the above nonsense, I noticed one other Pay Yourself Back angle. It’s not new, and I’ve taken advantage of it before. That said, I don’t recall previously mentioning it in an article.
The new Q3 Pay Yourself Back categories retroactively apply to Q2 purchases. During Q2, I used my Sapphire Reserve for a few public transit and parking transactions. These transactions now show up in my Pay Yourself Back page and display 20% more points value for Ultimate Rewards redemptions.
Meanwhile, as I expected now that we’re in Q3, I can no longer redeem Ultimate Rewards points for 25% more points value for Q2 purchases in the previously-eligible categories. I saw that a small grocery store transaction is now only redeemable for one cent per point value.
Conclusion
I probably sound more passionate about this minor devaluation than other Chase tweaks. That’s because it actually applies to me. Regardless, it’s a lame move by the bank which they naturally have the power to make. Cardmembers can choose how to respond, if at all. Chase is quite literally banking on things coming out in its favor. The only question I have for Chase now is, what’s next? I’m intrigued to see how the bank keeps hacking away. It’s not a matter of if, rather when.
What do you think of this Chase Pay Yourself Back devaluation?
The “Let Them Eat Cake” group won’t care about Chase’s war on value but for those of us in the less rarefied echelons of the socioeconomic ladder this just sucks. Apparently Dimon feels that providing value to cardholders is an optional thing. Let’s see if people cut up their cards to illustrate their frustrations.
Agreed. In retrospect, the CSR refresh was the beginning of an across-the-board onslaught. The reduction in Hyatt transfer rate came as no surprise. This PYB change is not a surprise. Nothing should be a surprise. And, it’s going to continue. Office supplies at 5x will ultimately fall. Chase is becoming a wasteland for anything other than SUBs on co-branded cards.
Good! Never understood the “pay yourself back” crowd (or those that cash out Amex Platinum Schwab at 1-1.1 cent each). I worked hard and invested well so never rely on my miles/points to cover bills or for cash. I use them for typically first or business class seats on the 2-3 multi-week international trips I take every year or the 10-15 domestic trips. Occasionally, I will transfer my CSR points to Hyatt is there is a 3 CPP or better redemption. All these are much more valuable than “pay yourself back” – that frankly just seems like a scam for people that really shouldn’t have the card and are using it to support their lifestyle.
To each their own I guess but seems sub-optimal to me.
How silly of me. I’ve been going on and on about myself and I haven’t stopped to let you talk about me.
It is easy – some people earn more than they can ever burn. Especially small business owners. They want to turn that into a rebate on their spending and it is a tax free kick back that they can keep themselves as a nice spiff to all their hard work. Some people are just better at earning miles and points, others look at it like a part time job etc. You are not everyone, everyone is not you. Lots of people travel more than what you listed and still have hundreds of thousands / millions of miles and points left over each year. Having them sit there and letting them constantly devalue is a bad investment. As someone that “invested well” I would think that you should understand that.
It is sub-optimal to redeem for such petty charges. I use my points to fly my help around (in economy, of course) as they follow me about in my private jet. I make my butler do the redemptions on a laptop he pecks with his nose. “Why using his nose”, you say? Because he is on all fours as I use him for a footrest whilst I watch TV. I’m sure I’m with the majority of readers here who do just that.