Brex has devalued reward points by 40% without any notice at all. Previously points were worth 1¢ per point and could be transferring to travel partners at a 1:1 rate. You now get 0.6¢ per point or can transfer 1,670 Brex points for 1,000 with one of their transfer partners. You can still get 1¢ per point when booking through their travel platform or when redeeming for giftcards.
Apparently Brex has received billions of dollars in new deposits with the collapse of Silicon Valley Bank. So this change is most likely due to that happening.
Hat tip to Award Wallet
Are the bloggers going to keep shilling for it?
Yes, yes of course they will.
Why is no one actually addressing the issue? I see no Brex devaluation and just transferred over 100K Brex points at a 1:1 ratio after seeing the AwardWallet and VFTW Posts on Friday. I logged back in and the ratios remain 1:1.
Getting a lot of unsolicited deposits from the fallout is both a blessing and curse, I guess.
These programs are notoriously expensive to run. Now they’re probably getting a bunch of new money from former SVB customers and freaked out at the ballooning expenses for rewards
Brex itself is a much shakier “bank” than SVB. Brex had a very tough time to get FDIC insurance cover in the first place and still do not have FDIC insurance for the cash held in their business accounts. They still send that cash into partner 4x “banks”, for upto $1mm coverage. THAT arrangement is fraught with loopholes like, for eg., in-transit cash is NOT covered, etc. Also, even for their individual accounts, Brex only very recently got FDIC insurance coverage, like in mid-2021. Comps which moved their monies there must have been the desperate ones, rejected by other banks.
SVB should NOT have gone for that “shoring up balance-sheet” move (by selling $21+B of tech junk bonds they had) and they’d still be around today, albeit extremely shaky. Truly speaking, there are still tons of junk “Fin-tech” garbage comps and NBFCs with much worse balance sheets and should have preceded SVB in their demise. The SVB fiasco, IMO, is only the start of a series of implosions yet to come in the junk-bonds credit markets, the NBFCs, especially those NBFCs stuffed to the hilt with consumer housing+auto loans + commercial real-estate loans, the so-called “Fin-Tech” junk-Tech (all frauds), and a slew of private equity funded (junk) Tech startups.
Imbecilic Jerome Powell (not even a qualified economist nor a finance graduate), single-handedly, pumped $11T of “monetary policy” free-money into the US economy, totally unnecessarily (against the advice of many economists), via both the 150-basis-pts-drop-in-1-day in FED funds-rate and the “helicopter money” buying of junk-bonds and MBSs. That was accompanied with another $9T “fiscal policy” free-money from US Congress, just into the US economy alone within that 1-yr (2020APR->2021JAN), apart from the colossal amounts pumped-in by the other Central-Banks around the world. That much tsunami of liquidity onto an already FED-pump-addicted US economy alone, led to an overdrive of excesses in all segments, between 2020APR->2023JAN. Now, with the liquidity being withdrawn since 2022MAY, albeit at this comparatively snails-pace, addiction-withdrawal spasms will surely result in wave upon wave of collapses. But if at any point, the Yellen-Powell combo become stupid enough to issue another series of Lehman/AIG-style govt. bailouts, the death-knell for the US-currency system is a certainty.
Interesting read Stu. May I ask your educational and professional background?
Undergrad in cheetos with a minor in chicken tendies. Masters in Cuckology.
They didn’t shore up a balance sheet. The customers wanted their money. You don’t want a bank to give money to its customers?
He’s talking about before they asked for the money back. Now go play with your monopoly money.
Not sure why you put partner “banks” in quotes. They’re actually banks (unlike Brex).
Also, Brex doesn’t offer individual accounts.
Rewards is an overhead cost that reduces profitability on each transaction processed. Ideally a CC company aims to pay zero rewards and they will keep devaluing. The goal is always get their product integrated into business’ operations, using things like rewards as bait to get a new sign up, then wean customers off rewards (devalue) extract more profit per transaction.
Who still has a Brex Account?? Interesting to hear they are potential beneficiaries of Silicon Valley Bank collapse. Really? Last year I got notice of account closer so I cashed in my $1100 initial bonus. Expensive customer acquisition cost with little benefit.
Venture backed businesses (not you).
Glad I cashed mine out long ago
SVB. More of these likely to come.
Who’d be next? I’m trying profit.
If you’re feeling extremely risk prone, try going short (possibly via options) on ANY of the crypto stuff – its ALL garbage anyway. It’ll all surely vanish, but timing (how long it’d take for the stupid sheeple to realize they’re HODLing sheep-dung) might be the ONLY issue, but returns COULD be huge.
Next in line could be the autonomous vehicle tech garbage startups (incl. Tesla), sans the top 2, viz., MBLY and Waymo/GOOGL. Some 16-20 names here.
Tons of garbage/fraud in the hyped-up AI space (incl. IoT, ML) could vanish. But much of it’s in private equity. So, tracing-out to the public markets could become an arduous task. So also in the “clean energy” fraud space.
Next could be the Fin-Techs and NBFCs. A short-list here (not exhaustive + do your own DD): CUBI, FRC, ALLY, PB, CLBK, DCOM, SASR, NYCB, PPBI, FFWM. Since they’re FIN related, manipulation (of books + stock) is in their DNA. So, extreme caution and DD needed.
Stu, do you have a best friend? I’m available.
I’d buy ya a beer 😉
i just logged into brex account and it is showing 1-1 redemptions to ek and cx ect to all airlines so i think this article is fake news