Introduction: What does inflation have to do with your credit card?
Inflation is probably a word you’ve been hearing much more often these days. Maybe you don’t pay much attention to it, or you think it won’t really change anything in your life. But here’s some not-so-great news: it affects almost everything in your daily routine.
That’s because inflation, simply put, the general increase in the price of things, can have a big impact on your finances. With high inflation, our purchasing power drops, making our money “worth less.”
With that in mind, keep reading to better understand how this works, how inflation can affect you, and how to try to work around its downsides.
Is inflation affecting rewards programs?
Yes, and quite a bit! As prices go up, rewards programs need to adapt to this new reality. Let’s say a plane ticket that used to cost $300 now costs $550. Based on that, if a program used to require 10,000 points to redeem a ticket, it might now require 15,000 points.
That’s just one example, but the point is: when inflation rises, rewards programs must adjust and start offering fewer advantages.
Cashback rewards are affected too, giving you smaller returns and making your money go a shorter distance.
Visible changes in credit card benefits in 2025
With inflation driving up costs, credit card issuers had to adapt, and that’s already reflected in the benefits offered this year.
Reduction or adjustment of bonus categories
Many categories that used to offer high returns, like restaurants or travel, have been cut back or adjusted. Some cards have reduced cashback or point percentages, while others have started placing caps on how much spending qualifies for bonuses. The goal is to balance costs without making the programs less attractive.
Partnerships more focused on basic needs
Groceries, gas stations, and pharmacies have become the new focus of many partnerships. As people are paying more attention to the essentials, credit cards have adapted to offer more value where it really matters day to day, including exclusive discounts and integrated loyalty programs.
Non-financial benefits gaining ground
In addition to traditional points and miles, cards are now offering perks that add convenience and protection. Travel insurance, purchase protection, access to airport lounges, and even exclusive experiences (like cultural or culinary events) are becoming more appreciated by cardholders, and a real competitive edge in 2025.
What can consumers do to keep earning?
Despite the challenging scenario, there are a few strategies users can adopt to lessen the impact. First and foremost, it’s important to evaluate which of the cards in your wallet are still worth keeping.
Some cards come with very high annual fees, which means that if you plan to cut back on spending, they may no longer be worth it, bringing more cost than benefit. Also, it’s crucial to understand which rewards programs your card is currently prioritizing.
Always prioritize credit cards that reward the categories you use the most to ensure greater benefits. By staying focused on programs that match your lifestyle, you’ll be able to maintain the highest possible return.
It’s also smart to keep an eye out for temporary promotions and rewards portals. Believe it, these opportunities can save you a good amount of money.
Conclusion: Adapting is essential to keep earning
The fact is: inflation has been rising for some time now. And to minimize its impact, we need to be strategic. That way, it’s still possible to enjoy some of the perks that credit cards offer. However, it’s always important to spend wisely during times of economic uncertainty. Never forget to save consistently and maintain a solid emergency fund.
In addition, setting a monthly budget can help you stay organized and aware of your finances, making it easier to spot areas for improvement.
With a few simple changes, you can manage your money, and your rewards, easily and efficiently.
