US regulators are looking at potential ‘bait and switch’ schemes with airline-affiliated credit card reward points

If you use a points-and-rewards credit card offered by an airline in partnership with a big bank, how much are the points you’ve accrued worth in dollars? And how much do you need to spend to get the best rewards?

If you use a points-and-rewards credit card offered by an airline in partnership with a big bank, how much are the points you’ve accrued worth in dollars? And how much do you need to spend to get the best rewards? If you’re not sure, you’re probably not alone. The terms and conditions of such card programs can be confusing and in some instances they can be changed at any time. Those were two of the issues discussed at a joint hearing held Thursday by the Department of Transportation and the Consumer Financial Protection Bureau, in an effort to examine ways to improve consumers’ experience with — and financial return from — the popular programs that can generate huge revenue for large airlines. “For many families looking to finance a trip or a vacation, those [credit card] benefits are really valuable. … It’s almost seen as savings – something in the bank that you will be able to spend,” said Rohit Chopra, CFPB’s director. “[But] our review of all the fine print suggests that credit card companies and airlines have the power to quickly and dramatically devalue those points by making it more challenging to redeem them. … This creates confusion over the true value of the points and raises some questions about fairness.” In some instances, Chopra added, consumers may pay fees for rewards cards “without a clear option to get a refund” when benefits get stripped away. Also raised at the hearing was concern for consumers who use rewards cards to carry revolving debt.