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BUSINESS Saturday 24 auguSt 2019
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Why streaming services are the new credit card rewards binge

By SARA RATHNER any rewards card, look for
NerdWallet categories that match your
Associated Press spending enough to offset
When it comes to credit that cost.
card rewards, it’s not all BUILDING RELATIONSHIPS
about gas, groceries and WITH YOUNGER SPENDERS
restaurants anymore. Is- Per the Deloitte survey, 70%
suers are moving beyond of Gen Z households (ages
suburban staples to include 14 to 20) had a streaming
millennial-friendly catego- subscription in 2017, as did
ries such as transit and 68% of millennial house-
streaming subscriptions. holds (ages 21 to 34).
The trend toward stream- Experts say credit card issu-
ing rewards, in particular, ers see an opportunity here
is hard to miss, with cards to lure customers while
from American Express, they’re young, reward-
Chase and Wells Fargo now ing them for the spend-
featuring streaming as a ing they’re doing anyway
bonus category. But what’s while also converting them
behind this explosion? For into long-term cardholders.
starters, streaming is wildly “As the consumer gets old-
popular. As of 2017, more er, and presumably begins
than half of U.S. households to spend more, the credit
subscribed to paid video- card company has already
streaming services, ac- This Jan. 17, 2017, file photo, shows Netflix on a tablet, in North Andover, Mass. secured their business,” Al-
cording to Deloitte’s digital Associated Press lec says.
media trends survey . But three such services. earn 1% back.) From July their favorite show,” Mad- Subscription services can
experts say it’s also about Issuers have taken notice. 1 to Sept. 30, 2019, one of hok said. give these relationships
issuers forging early con- Wells Fargo made a splash those bonus categories is Of course, your month- staying power, too, be-
nections with younger con- last summer, revamping select streaming services. ly Netflix bill likely repre- cause they’re typically
sumers and ensuring that the Wells Fargo Propel Kunal Madhok , vice presi- sents only a fraction of “set it and forget it” trans-
they remain customers. American Express, which dent of U.S. consumer your household budget , actions. If an issuer can
“The strategy is simple: If a now earns triple points lending and acquisition at so don’t expect a boat- get you to use its card
consumer opens a credit back per dollar spent on American Express, noted load of rewards from this as your automated pay-
card when young, the (is- eligible streaming services. via email that AmEx re- category alone. Say your ment method each month,
suer) can build a long-term In May 2019, the Blue Cash search found that a seg- family spends $15.99 per you’re more likely to keep
relationship with the con- Preferred Card from Ameri- ment of millennials were month on Netflix Premium, it — even if you never take
sumer,” says Logan Allec, can Express underwent a spending more on “day-to- $14.99 per month on a Spo- the card out of your wallet.
a CPA and founder of the makeover, adding select day” costs like commuting tify Family plan and $5.99 “Credit card companies
financial blog Money Done U.S. streaming services as a and streaming compared per month on Hulu, for a want consumers to choose
Right . 6% cash-back category. with five years ago. So the total of $443.64 per year. their cards for subscrip-
MEETING PEOPLE WHERE The following month, the Blue Cash Preferred was If you earn 6% cash back tions as it’s a regular — of-
THEY’RE SPENDING Chase Freedom entered reworked to reward card- on these services by pay- ten monthly — recurring
The Deloitte study notes the streaming fray. The holders more heavily for ing for them with the Blue transaction that they can
the percentage of U.S. card earns 5% cash back these types of costs. Cash Preferred Card from rely on as a base of card
households subscribing to in bonus categories that “The card is designed to American Express, that’s spend,” says Derek Szeto ,
a paid streaming video rotate each quarter, on up give people the most cash just $26.62 in rewards per co-founder of Butter , a tool
service grew from 10% in to $1,500 in spending per back on the things they year . that helps consumers track
2009 to 55% in 2017 — a quarter. (You must opt in to value and spend frequent- And that doesn’t take into and manage subscriptions.
450% increase. Consumers the bonus categories each ly on, now including qual- account the card’s $95 an- “Active cards are sticky
subscribe to an average of quarter; all other purchases ity time at home streaming nual fee. When choosing cards.”q

Stocks edge lower as traders weigh

Fed chief remarks

By ALEX VEIGA Trump’s trade wars have complicated the
Associated Press central bank’s ability to set interest rate
Stocks edged lower in early trading on policy. Powell reiterated that the Fed “will
Wall Street Friday after Federal Reserve act as appropriate to sustain the expan-
Chairman Jerome Powell gave no clear sion.” The Fed cut rates last month for the
signal on additional interest rate cuts. first time in a decade, and most investors
Stocks recovered some of their losses from expect it to cut rates again in September
an early slide caused by the latest esca- to shore up U.S. economic growth.
lation in the trade war between the U.S. Beijing said Friday it would retaliate
and China. against the most recent round of tariffs im-
Speaking at a Fed policy conference in posed by Washington with duties on $75
Jackson Hole, Wyoming, Powell noted billion of U.S. products. The tariffs of 10% In this Aug. 19, 2019, file photo traders Gregory Rowe, left,
that there’s growing evidence of a glob- and 5% are to take effect on two batches and Michael Milano work on the floor of the New York Stock
al economic slowdown and suggested of goods on Sept. 1 and Dec. 15, the of- Exchange.
that uncertainty over President Donald ficial Xinhua News Agency said. q Associated Press