9/22/2014
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`Print: Experience rewards pay off for some credit card users
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`CREDIT CARDS
`Experience rewards pay off for some credit card users
`By Jay MacDonald • Bankrate.com
`
`Michael McAvoy's parents dreamed up an out-of-this-world gift for his 13th birthday: five days at NASA space camp. Cost:
`130,000 Diners Club rewards points.
`
`When 57-year-old William Elkjer heard the call of the wild, he and his wife Candy conquered 180 miles of Alaskan snowfield
`on an eight-day, professionally led dogsled trek. Cost: 500,000 Diners Club rewards points.
`
`For the mundane necessities of life, there are credit cards. For the adventure of a lifetime, there are "experience rewards."
`
`Diners Club and American Express have taken their rewards programs to this sky's-the-limit level. Their best customers get
`to redeem points in any way they choose -- as long as it's legal. Some of life's rich and rare opportunities that have been
`enjoyed thanks to mega-points include cosmetic surgery, cooking school in Tuscany and backstage passes to a Dave
`Matthews concert. Experience rewards to a lesser degree have caught on with a handful of Visa and MasterCard issuers,
`as well.
`
`"For card members with millions of points, it is hard to excite someone with another TV or a $100 Saks gift certificate. It
`really takes something special," says Ashley Miller, vice president of club rewards for Diners Club North America. "For
`them, the question is, 'What can I do with my points that I would probably never pay for?'"
`
`Desiree Fish of American Express says experience rewards acknowledge that the last thing most road warriors need is
`another airline ticket or new set of luggage.
`
`"People used to think of credit card rewards programs as travel only. Travel is still very popular, but a lot of people
`accumulate rewards because they travel a lot, so they may not want to use their points for another airline ticket. They may
`want to experience something that maybe they wouldn't be willing to spend their money on because they think it is too self-
`indulgent."
`
`Says Miller: "It's all play money."
`
`Paying for dreams in points
`In 1995, a decade after it introduced its Club Rewards program, Diners Club began offering personalized rewards to
`cardholders who had accumulated more than 100,000 points. American Express, which launched its Membership Rewards
`program in 1991, expanded into experience rewards two years ago with Your Reward, a design-your-own-reward program.
`
`The idea of enhanced rewards points wasn't groundbreaking. After all, private-label card issuers such as Neiman Marcus
`and Bloomingdale's had been offering luxurious experiences to their top customers for some time. But it did open the door
`to anyone who had the points to qualify.
`
`And it was a natural evolution for Diners Club and American Express. Both card companies had long offered personalized
`concierge services to their top customers, as well as by-invitation-only access to special concerts, celebrity food-and-wine
`tastings and sporting events that they sponsored. It was easy to lower the velvet rope and admit cardholders who had
`amassed a sizable bank of rewards points over the years.
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`To redeem your wildest dream, you simply share your wish with your credit card concierge. They make all the
`arrangements for you, calculate the dollars-to-points conversion and tell you the damage (the service is free, by the way).
`You may pay all or part of the bill in points or, if you're a few points shy, by cash, check or, of course, your credit card.
`
`And what a time folks are having with all that "free money."
`
`Diners Club rewards points have been redeemed for:
`
`A honeymoon in Bora Bora
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`http://www.bankrate.com/system/util/print.aspx?p=/finance/credit-cards/experience-rewards-pay-off-for-some-credit-card-users-1.aspx
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`9/22/2014
`A Tiffany engagement ring
`Bar mitzvahs in Israel
`An eight-day cooking school in Rome
`A Napa Valley mystery train dinner for two
`Safaris in Africa
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`Print: Experience rewards pay off for some credit card users
`
`American Express rewards have been used for:
`
`An RV tour of New Zealand
`A three-day polo clinic with a renowned instructor in Palm Springs, Calif.
`Rental of a private island for a dinner party
`
`Rewards points have also paid for liposuction, hypnosis, Lasik eye surgery, dental work and a Cavalier King Charles
`spaniel puppy. But experience rewards don't have to be frivolous or self-indulgent.
`
`"We see a ton of redemptions for college tuition. Just in the last month, somebody redeemed over 1 million points for tuition
`at the Illinois Institute of Art," says Miller.
`
`And some cardholders still use their points for more down-to-earth, but still costly, purposes such as home improvement.
`
`"During the recession of the past couple of years, we really started seeing a trend toward redeeming points for more
`everyday needs," says Miller. "We see blueprints for a new home, somebody had their house painted. Someone just
`redeemed a million points for a new Sharp projector for their business."
`
`Calculating reward costs
`So just how much do you have to charge to rack up experience rewards? It depends.
`
`The dollars-to-points conversion is inexact, at both accrual and redemption. You may earn one point for every $1 you
`charge, but special promotions and partnerships can accelerate that rate significantly, just as they can when you redeem
`your points.
`
`For instance, although tickets to a recent American Express-sponsored celebrity chef event in New York City cost $325 or
`79,000 points (roughly $41 per 10,000 points), merchandise in the company catalog averages closer to $100 per 10,000
`points.
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`But as long as you have a balance in the rewards bank, no experience is too big or too small to pay for with points.
`
`"Using points does not have to be a huge adventure. It can be as simple as going down to the Four Seasons for a wine
`tasting on a Sunday afternoon. There is no minimum and no maximum," says Miller.
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`Mainstream cards entering the arena
`Experience rewards are beginning to catch on with a handful of major card issuers, as well.
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`Disney recently partnered with BankOne Visa and Universal Studios teamed up with J.P. Morgan Chase MasterCard to
`offer credit cards with points redeemable for passes or discounted admissions to the associated theme parks. Citibank has
`taken it one step further, offering select experiences such as dolphin swims and snowmobile rides to major point holders.
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`Whether the trend becomes the norm may well depend on how effective experience rewards prove to be at luring and
`keeping customers in the already saturated credit card market. But for some cardholders who have amassed a stockpile of
`points, the reward now may literally be the chance of a lifetime.
`
`"People look at experiences as a really good return for their points because they wouldn't get to have that experience
`otherwise," says American Express's Fish. "Getting access as our card members did recently to a reception with Tiger
`Woods and Ernie Els, two of the top golfers in the world, at the World Golf Championships in Atlanta is a great experience.
`How many people actually get that opportunity?"
`
`Jay MacDonald is a contributing editor based in Mississippi.
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`Posted:Nov. 17, 2003
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`Location of article:
`http://www.bankrate.com/finance/credit-cards/experience-rewards-pay-off-for-some-
`credit-card-users-1.aspx
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`http://www.bankrate.com/system/util/print.aspx?p=/finance/credit-cards/experience-rewards-pay-off-for-some-credit-card-users-1.aspx
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