Crumbling user experiences part 1
of the financial kind
Over the years, I have had a multitude of user experiences with financial products and I plan to write about them here. These will be multi-part as these experiences with various service organizations are very much interrelated and so I shall peel these layers one onion peel at a time.
Today, I am going to talk about my experience with Capital One Mastercard here in Canada. Eons ago, perhaps 10 years ago, both my wife and I signed up for what Capital One calls the Aspire Travel Mastercard. Two primary drivers for this card were a low yearly fee of $20 (it was a $120 per year fee card, but masked by 10,000 yearly renewal reward points) which literally made this like a $0 fee card. The second and major driver of course was the 2% cashback redeemable against travel purchases. As we heavily spend on our credit cards on anything that can be routed through it, we got around $1,200 a year cashback (which is equivalent to double the money post-tax in a high tax economy like Canada)
Over the last year, our travel had dropped to zero and it became difficult to redeem the rewards. We have accumulated rewards of over $800 between the two of us, whilst earlier we could redeem it each month or as soon as we could (based on my belief that a dollar today is worth more than a dollar tomorrow)
Slowly Capital One started unwinding the benefits on this card. Last May, they sent a letter stating that the renewal points were being withdrawn. That would make the fees of our two cards a combined $240 a year. Ding. And then a few months ago, they again reduced the 2% award to 1.5%. They are slowly making the product untenable to the user, removing the purpose that it initially served. That begs a couple of questions - does the product serve the customer or the corporation? Or does it serve the corporation as an outcome of serving the customer?
I have seen these stories and patterns with American credit card companies play out in the Canadian market. First was Citibank. They finally exited selling their portfolio to CIBC. This should be ten years ago. Then went Chase Canada. They closed their business down. Then went MBNA. Who sold their portfolio to TD Bank. Capital One is the last one (from the US) standing. I see them selling out to someone…. you see the trend on how the product is managed as a correlation to where they end up going. The singular driver for their current portfolio is their co-branded card with Costco being the last thread of business that they are holding on to.
Again these are patterns I see and time will tell whether my call was right. But, we are human right? We certainly can have opinions based on patterns of experiences. This is what one might call “intuition” - the more the experiences, then more the patterns, the higher the possibility that “intuition” has a higher probability of being valuable.
Not that I am looking for any utility except the joy of writing these opinions. The story continues in part 2…