More than 90 percent of general-purpose credit card spending has flowed through rewards cards since 2019, according to the CFPB’s report on the consumer credit card market. With hundreds of billions of dollars in annual purchase volume riding on points and miles, even small changes to redemption rates ripple across millions of accounts. Federal regulators now say those changes have tilted too far in issuers’ favor, and the financial disclosures of major card companies help explain why it keeps happening.
Regulators call it a bait-and-switch
The Consumer Financial Protection Bureau fired the sharpest warning shot when it published guidance labeling certain reward devaluations as bait-and-switch credit card rewards tactics. The agency argued that luring customers with generous sign-up bonuses and then quietly reducing what those points can buy may violate existing consumer protection law. That means nearly every swipe in the country generates points whose value the issuer can change at will.
Then-CFPB Director Rohit Chopra sharpened the critique during a joint congressional hearing on airline and credit card rewards. In prepared remarks, Chopra compared loyalty points to a “currency market,” warning that fine print allows companies to “quickly and dramatically devalue” points by raising redemption thresholds or restricting seat and room inventory. He singled out a specific harm: consumers who commit to annual fees based on advertised benefits, only to see those benefits diluted after they have already paid.
That framing challenges the industry’s long-standing position that rewards are voluntary perks, not contractual promises. If points function like a currency, sudden devaluations look less like routine program updates and more like a quiet transfer of value from cardholders to issuers. Chopra was removed from the CFPB in February 2025, however, and the agency’s enforcement priorities under new leadership remain unclear as of May 2026.
The balance-sheet math behind devaluations
Corporate filings reveal the financial pressure that makes devaluations attractive. American Express disclosed in its 2024 Form 10-K that it carries outstanding Membership Rewards points as a liability on its balance sheet, modeled on assumptions about how many members will redeem and at what cost per point. The filing reported approximately $11.4 billion in card member services and rewards expenses for fiscal year 2024. Small shifts in redemption assumptions can move that figure by hundreds of millions in either direction.
That sensitivity creates a direct incentive. When outstanding points represent a growing obligation, raising redemption thresholds or steering members toward lower-cost options is one of the fastest ways to shrink the liability without cutting the marketing appeal of the program. For the cardholder, the math is blunt: points earned under one set of rules buy less under the new set, with no reduction in what it cost to earn them. Comparable disclosures from JPMorgan Chase, Capital One, and Citigroup are less granular, so the AmEx figures may reflect its unusually premium card portfolio rather than an industry-wide norm.
Airlines face their own probe
The U.S. Department of Transportation opened a separate front in 2024, launching a formal probe of the four largest U.S. airlines’ rewards practices and ordering carriers to produce records. The DOT named “devaluation of earned rewards,” “hidden or dynamic pricing,” and reduced consumer choice as specific areas of concern.
Because many credit card programs are co-branded with airlines or allow point transfers into frequent-flyer accounts, the two investigations overlap in practice. A consumer who earns Chase Ultimate Rewards points and transfers them to United MileagePlus, for instance, faces valuation decisions made by both the bank and the airline. Neither entity is required to coordinate with the other or to notify the cardholder before changing terms. As of May 2026, the DOT has not published findings from the probe.
What remains unanswered
For all the regulatory attention, several important gaps in the evidence persist. The CFPB has not released aggregated complaint data specific to rewards erosion, so the frequency and dollar magnitude of individual losses are hard to quantify. Well-documented program changes offer some texture: Marriott Bonvoy raised peak-night award thresholds significantly in recent years, and Delta SkyMiles eliminated its published award chart entirely in favor of dynamic pricing that fluctuates with cash fares. But no official tally or independent academic study has measured the rate of devaluation across programs over time.
A broader question also hangs over both investigations: whether rising costs in travel and hospitality are the primary driver of higher redemption prices, or whether issuers and airlines are using inflation as cover to widen margins. Chopra’s 2024 remarks pointed to structural incentives that favor devaluation regardless of the economic environment, but no regulator has published an analysis isolating the causes. The distinction matters for cardholders. If devaluations are mainly cost-driven, they may ease as inflation cools. If they are baked into program design, cardholders should expect them to continue no matter what the economy does.
What cardholders can do now
Neither the CFPB nor the DOT has issued final rules, consent orders, or penalties related to rewards devaluation. Consumers should not expect immediate relief from these investigations. But the evidence already available points to several practical steps worth taking now.
Redeem sooner rather than later. Unlike cash in a savings account, points carry no guarantee of future value and no deposit insurance. Every day a balance sits unredeemed, it is exposed to the next program update. Cardholders sitting on large balances, especially those paying annual fees of $250 or more, face a straightforward choice: lock in today’s redemption rates or accept the risk that tomorrow’s will be worse.
Track your redemption value. Most issuers publish award charts or dynamic pricing tools. Comparing what a specific redemption costs today against what it cost six or twelve months ago gives a concrete measure of erosion. For anyone paying a triple-digit annual fee, that comparison should happen at least once before the renewal date. The fee is fixed. The rewards value is not.
Consider cashback as a hedge. Flat-rate cashback cards, typically returning 1.5 percent to 2 percent on all purchases, pay a fixed dollar amount that does not fluctuate with issuer decisions. They will not deliver the outsized value that a well-timed points transfer can, but they also will not lose value overnight because an airline restructured its award chart.
Diversify transfer partners. Cardholders who use flexible-point programs like Chase Ultimate Rewards, AmEx Membership Rewards, or Capital One Miles can spread risk across multiple airline and hotel partners. If one program devalues, having the option to transfer elsewhere preserves at least some of the original earning power.
The regulatory actions described here confirm that the federal government recognizes rewards erosion as a consumer problem and has begun demanding records and issuing guidance. Whether that process leads to enforceable protections depends on decisions that have not yet been made. In the meantime, the safest assumption for cardholders is the one the evidence already supports: points are not savings. They are a depreciating asset, and treating them that way is the best defense against the next quiet devaluation.
