Written by Ted Rossman, Edited by Brooklyn Lowery
This is a major contributor to the low consumer sentiment readings reported by the University of Michigan, The Conference Board and other popular indicators. By and large, even if you’re working and your wages are going up, you don’t feel like you’re getting ahead because your costs are rising even more.
Sadly, the news doesn’t get much better when it comes to another form of “currency” you might have at your disposal. What you might not realize is that inflation is affecting your credit card rewards, too.
@bankrate Inflation isn’t just driving up prices, it’s quietly eating into your credit card rewards too.
♬ original sound – Bankrate | Financial Education – Bankrate | Financial Education
Spending caps haven’t budged
What you might not realize is that inflation is affecting your credit card rewards, too. For starters, spending caps haven’t kept pace with rising prices. I love that the Blue Cash Preferred® Card from American Express gives 6 percent cash back at U.S. supermarkets. I don’t love that the elevated rewards are capped at $6,000 in annual spending — the same threshold that has existed since 2013. Purchases beyond the limit only earn 1 percent cash back.
Adjusted for inflation, $6,000 in 2013 equates to $8,344 today, according to USInflationCalculator.com. Because the spending cap hasn’t gone up, this essentially means that the promotion is worth 39 percent less now than it was 12 years ago.
The same issue is affecting many other popular credit cards, including popular rotating category cards such as the Chase Freedom Flex®* and the Discover it® Cash Back card.
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This article originally appeared here and was republished with permission.
