Grand Reserve Mastercard from BD12 shutting down

Just got an interesting email that I did not expect. The Grand Reserve Mastercard that I (and i assume a fair amount of others signed up for as part of the special offer for BD12 is shutting down. I never saw something like that happen before… It is a good sign that they are paying out the rewards… but very interesting that a credit card would shut down like that

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As a valued Grand Reserve World Mastercard cardmember, we want to ensure that you’re informed about important changes to your account.

On March 9, 2022 the Grand Reserve World Mastercard program will end (“the program closure”), including the closing of your Grand Reserve World Mastercard, issued by Celtic Bank, and the Grand Reserve Rewards program, provided by Vertical Finance, Inc.

If your card anniversary date falls after December 17, 2021 you were not charged a renewal annual fee; your continued use of the card through the program closure is provided at no fee. If you were charged an annual fee after March 9, 2021 you will receive a pro rata refund for your annual fee prior to the program closure as a credit to your card.

We will not renew any annual fee benefits such as your Priority Wine Pass or magazine subscription between now and the program closure. Your existing subscription and wine pass will continue to work until its prior expiration date.

You may continue to earn points as before, up to and including the date of the program closure. You may redeem points via the Grand Reserve Catalog or pay with points at the ProofLoyalty store.

If you choose not to redeem your points prior to the program closure, you will be issued a prepaid virtual debit card equal to the value of your rewards points. To calculate the value of your rewards points we will multiply your balance at the program close by $0.008 per point and round to the nearest cent. You do not need to take any action to receive a distribution of your rewards points on a prepaid card, although your account must be in good standing in order to be eligible for a cash distribution. The virtual card will be delivered to your email address on file. Please allow up to one week for distribution of your virtual card (March 16, 2022).

If you have a balance on your Grand Reserve World Mastercard account after the program ends:

You will receive monthly billing statements until the balance is paid in full.
The terms of your account, as stated in your cardholder agreement, will apply until your balance is paid in full.

Yeah, just got the same one. It was my go-to for all wine and restaurant purchases, but it’s possible the fees and such just killed them. Sad.

I got an order in for some points redemption. Nothing I couldn’t get otherwise but had been holding off on.

Same with me. Used it for all wine purchases. I have over 110,000 points… after a quick perusal of the rewards… i might just opt for the $0.008 per point payout …

and use it to buy more wine… [cheers.gif]

It turns out that high income / high spending households usually don’t carry much interest bearing balances, thus making these cards hard to work as stand alone business lines. Even Citibank, not exactly a slouch in the cards business, wasn’t able to make their flagship Prestige card work.

At least members are sort of allowed to extract some value for their points.

Who knew that the rich were such moochers?

Bummer - I know many folks on this board really enjoyed using this card . . .

Cheers

Yea, made the same comment about the closure and high income / sustainability issues on the berserker thread for this card. It has to be hard to maintain business when paying out rewards at $0.008 a point, which arguably translates to $0.024 a dollar or higher, assuming you are purchasing wine/dining with the card. If your average transaction fee is around 3%, there is not a lot of margin left to be had if purely relying on transaction fees alone and not making much on interest.

This also assuming that $0.008 is a fair way to assess the general reward economics before the card closure was determined.

A friend worked in the marketing department for a big bank. Those who paid their large bills on times had a nickname of “deadbeats” at the bank

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Well if you think about it, by definition, users of this card are flush in “Liquid assets” [snort.gif]

There are a bunch of other fintech / new rewards for alternative payments out there now. Maybe this is the canary in the coal mine.

I use it for all my wine purchases unless it’s the week my payments hit. I’ve recouped almost all my points, still 15,000 left. I have 36 new Glasvin universals, 4 Grassl Mineralite and a few sundry items. That’s over $1,000.00 retail in wine glasses alone.

Guilty as charged, I pay in full every month.

I’m in the same camp that pays it in full every month. I’m not too surprised though with how much value the card offered and the niche market.

There’s more than one way to make money on credit cards. The issuer typically gets paid % of each transaction. For the bigger banks, these kickbacks can get up to 1.5-2%+, which covers the cost of the rewards themselves. The banks can do various datamining on customer purchases and sell that to businesses. Then there are fees. For the deadbeats who pay on time, they might not be making interest or late fees. But there remains annual fees, charge back fees, nsf fees. The rewards themselves can earn money (ie commissions for travel sales, discounts on gift cards).

Carrying debt isn’t needed for credit card profitability.

While the execution wasn’t perfect, I really appreciate the effort and idea. Overall, I enjoyed it while it lasted.

Not sure why Prestige failed when so many other high fee cards are doing well. You can tell they were losing money as the benefits got worse and worse over time. For awhile it was THE BEST card.

Been trying to order a bottle from the vault for the last month. Guess that isnt going to happen.

Also one of the ones that paid off every month. My only complaint until now is that it took a looong time for a payment to final get applied to the balance.

You need to call proof loyalty to place an order. I did that this morning.

I don’t think the other high fee cards are actually doing ‘well’. I think they just view them differently, i.e. not as stand alone products, but rather as part of their overall suite. Citi expected Prestige to make money all by itself; Chase views their Sapphire Reserve as part of the overall brand.

On some random investor call, the Citi IR people were noting that only 1 of 10 Prestige customers carried balances, and even that, may not have been interest bearing balances.

If an efficient/ruthless operator like Citi couldn’t make money at that, its hard to see how a mickey mouse bank could.

I never understood that either…whether i tried to pay using billpay from my bank (which was even worse, or direct from the website, it took a long time to post