Earlier last week there was some speculation (first by Travel Codex and then Miles to Memories) regarding negative changes to the Barclaycard Arrival Plus card, as it had stopped accepting new sign ups (the apply now button is still replaced with a check back later button). These changes have now been confirmed, so let’s have a look at what is actually changing, when, our analysis of these changes and what we can do to potentially profit from this situation.
The Changes
- Redemption bonus will be lowered from 10% to 5% (basically making the Plus a 2.105% travel card instead of 2.22%)
- Redemption bonus will be applied to other redemption options (cash, gift cards & merchandise)
- When redeeming against travel expenses, the minimum threshold will be increased to 10,000 points from 5,000
- When redeeming for cash, the minimum threshold will be increased to 5,000 points from 2,500 points
- TripIt Pro will no longer be included on the Barclaycard Arrival Plus card
- Tourist attractions will no longer be a travel category
When these changes go into effect depend on when you applied for the card. Here are the rules:
- If you applied for the card before September 30th, 2014 then they will go into effect on November 1st, 2015
- If you applied for the card on or after October 1st, 2014 then they will go into effect on August 1st, 2016
The reason for the different dates is that credit card issuers typically don’t like to make big changes to their rewards structure within the first year of being approved for a card, even though it’s legal for them to do so.
Analysis Of These Changes
For me the biggest change is that the redemption bonus is being lowered to 5%, considering there are so many other cards that earn 2% cash back or higher with no annual fee it really doesn’t make sense to keep this card long term at all. It didn’t really make a lot of sense to keep this card long term before this change either and now it’s even worse.
You’d need to spend almost $90,000 ($84,550 exactly) on this card compared to a 2% cash back card, just to cover the annual fee. If you’re spending $90,000 annually on non bonus categories, then you’d be better off picking up the Discover it Miles card and earning 3% cash back for the first year and pocketing another $900.
Having to redeem in against travel purchases of over $100 is also another big negative, I have a lot of travel changes but usually the Barclaycard Arrival Plus wouldn’t be my first choice (I’d rather earn points or a category bonus if possible) anyway.
Getting Compensation
Whenever a credit card has it’s benefits or rewards program devalued, you should always ask for compensation for these changes. Credit card issuers are usually desperate to keep cardholders during this period, as they don’t want bad retention numbers after a negative change. With Barclaycard you’ll typically need to speak to a supervisor to receive any sort of compensation/retention on the Arrival Plus card, the normal retention offer is to get the annual fee waived for the following year.
Because these changes haven’t been officially announced by Barclaycard yet, it’s not currently possible to receive compensation. That being said, you should still call now and ask if there are any retention or spending bonuses currently available and that you’re worried about potential negative changes to the card. I was able to get the AF waived for the following year this way, when the changes are officially announced I’ll call again and try to get 10,000 bonus points to compensate for the changes.
Do you think you can still use the arrival card to buy tickets to Disney. I know it was possible before through tourism vendors, but will that no longer be allowed?
I got the letter from Barclay today that Redemption bonus will be lowered from 10% to 5% will start from November 17, 2015.
Looks like theirs going to be changes to the no annual fee version as well. What would be a better alternative if I decided to Cancel that one?
If you cancel Barclaycard Arrival Plus Card, what alternate option you would choose?
Few of alternate I can think off are:
1. Discover It mile – Discover
2. Fidelity Investment Rewards – Amex
3. Citi® Double Cash Card – Master
4. Venture From Capital One – Visa ($59 after 1st year)
Only 3rd and 4th option are more viable due to universal acceptability.
I’d personally go for 1 or 2, I actually don’t find acceptance to be that much of an issue and I think the 3% cash back/AmEx sync offers more than make up for it.
Good thing I cancelled my Arrival card this year… given these changes, no looking back!
It’s neither 2.11% nor 2.105025%..
the math is
0.02+0.02*0.05+0.02*0.05*0.05… = 0.02*(1+0.05+0.05^2+0.05^3….). The solution to this is 0.02/(1-0.05) = 2/95 = 2.105263%
The break even point is $84,550
Oops – tossed an extra zero in there accidentally. Thanks for the catch. In any case, 2.105 just isn’t very useful considering you’re paying $89 and giving up on amex offers for that 0.105%.
Updated post to make this clearer, I was just rounding up before but agree it doesn’t make a whole lot of sense to do so.
I cancelled the Arrival+ card a few weeks ago. I’d held it for two years, paid the annual fee after the first, and put probably 50-70k total spend on it with MSing. I was given no spend offers, retention bonuses or anything–they were perfectly fine with letting me go despite plenty of evidence that I would be a long-term profitable customer. I’m not, like, upset about that, really, though I did find it sort of surprising, especially when a few weeks later I called to cancel the US Air/Aviator card and they immediately offered to waive the annual fee, which I accepted. I don’t really know what to make of the fact that they didn’t blink at losing me as a customer for a card that I was using a ton whereas they immediately accommodated me to keep me holding a card I’ve put a total of like $25 on in the last year.
Anyway, all that to say I would be surprised if they gave compensation for this given that they are apparently generally not that concerned with losing Arrival+ customers.
Obviously the cost to them for a miles is much less than arrival points
You probably weren’t a profitable customer for them, I can’t imagine they’d be profiting on that amount of spend unless you were paying significant fees. They are probably purchasing miles much cheaper and making a profit on the interchange fees which was why they were more lenient on AF waiver.
Still surprised you couldn’t get AF waived tho.
@Jay — your data point plus the recent changes leads me to believe Barclay was losing money AT EACH AND EVERY SWIPE. Unless you were carrying interest, paying cash advance fees, paying annual fees, paying late fees, etc., you were not worth keeping around.
Your math is off. The 2.22% was due to 10% refunds on the 10% refund. Instead of 2.222… the 5% gives you 2.105025…
That means the breakeven point for the $89 fee relative to an amex fidelity is almost $89k. And if you get amex offers, fuhget about it.
I rounded up to the nearest second decimal place, just like before I rounded down as it was actually 2.2222222222222222222222222%. I’ll go to a third decimal to make it clearer for folks.
You may also have the dates backwards. People who applied after Oct 1st 2014 would have the later date for the change than people who applied earlier if your logic is valid.
Keep in mind one is in 2015 and the other is in 2016, pretty sure I have the dates right in the post.
You said the changes have now been confirmed, but then go on to say they haven’t been officially announced. Who confirmed them?
I’ve confirmed them, but Barclaycard hasn’t officially announced the changes on their website and not all CSR know about the changes.