Your frequent flier miles are soon to be worthless

Sunday Morsels

An article in the New York Times yesterday reminded me of another casualty of economic contraction - credit card affinity and retail loyalty perks. I foresee the exact opposite of author Ron Lieber's viewpoint; he believes these credit card/airline miles are some kind of birthright, and I believe they will be yanked and/or sharply curtailed forthwith as corporations realize that their obligations far exceed any perceived advertising benefit. By the way, I (courteously) attempted to rebut directly on the NY Times site, with a link to this blog, and was summarily excised from their comment list.

Has anyone noticed that many large corporations have completely jettisoned their 401K matching benefit for employees? In this disaster of an economy, why would any revenue-challenged organization continue to give away something that has zero tangible return on investment, and in fact is a massive unreported liability on the books of many perk issuers?

With all due respect to my esteemed Penn alumni brother David Wyss (see item #4 in this article), he is living in a different Solar System if he doesn't think we are already sliding into a Credit card disaster of heretofore unknown proportions. The combination of reduced spending and outright default/chargeoffs will crimp all affinity programs across the board - airlines, other hospitality outlets such as hotels, retail, and so forth. Why else is American Express already taking Billions of YOUR tax dollars in order to just survive as a going concern?