Managing Credit Card Gamers: Thematic Considerations in an Evolving Environment

Navigator Edition: May 2017
By: Tom Skomba

As the rewards “arms race” continues for credit cards, gamers – broadly, cardholders who aggressively seek ways to maximize value earned – have gained the industry’s attention.  In response, issuers are examining options to address gaming behavior.  Conceptually, with upwards of a million dollars at stake for just a few basis points variance on a multi-billion dollar spend portfolio, the potential impact is material from a community that ranges from informed users to manufactured spenders.  We have observed several axes on which issuers are taking action and provide an overview in this article of thematic considerations characterizing issuer approaches.

Figure 1:  Gamer Management Strategies
Source: First Annapolis Consulting analysis.

Dimensioning strategies on one axis is a choice to pursue adversary or ally strategies when it comes to gamers.  The former, by limiting gamers’ access to rewards, has ostensibly attracted greater mainstream attention, with a storyline built on conflict between issuers minimizing line-item cost and gamers maximizing rewards.  Less publicized, instances of aligned behavior between issuers and gamers are also observed.

While on a stand-alone basis a gamer is unlikely to be a desired account, positive general equilibrium impacts may outweigh localized line item costs in certain cases.  Affiliate bloggers, for example, are an established channel for growing accounts and may be compensated for their efforts while engaging in gaming or gaming-promotional activities.  The launch of the Sapphire Reserve in August 2016, for which Chase reportedly did not invest in any paid launch advertising, highlighted additional perceptual considerations.  With inbound interest building in the early stages through social networks oriented towards a core gamer audience, momentum grew and the echo of largely positive voices may have bolstered the product’s mainstream appeal.  While the extent of potential network impacts warrants further testing, subsequent premium card launches from different issuers have seen details of their value proposition “leak” or be quickly disseminated through rewards-focused alternative media sources.

As a second axis, the aforementioned may be further considered as proactive or reactive to gamer actions.  Up-front signals are provided to gamers through product design and public statements, and issuers are becoming increasingly sophisticated in deploying other methods, such as underwriting analytics, as highlighted by American Express in their 2017 Investor Day presentation.  As gamer forums are often digital, social media monitoring and other cyber-tactics may have sufficient value to warrant use case testing though the extent of their presence cannot be verified in the open source.  Reactive options, including product and account reviews, have also become more robust, with several emerging factors, including new technologies, regulatory demands and product bundling, shaping approaches.

Ultimately, gamer management is an evolving topic in which strategies are still being identified and tested. Market conditions suggest the motivations and activities of gamers can vary by segment and portfolio, providing opportunities for issuers to unlock value by blending different tactics, techniques, and procedures into tailored approaches fit for their portfolio needs.  As the strategic environment continues to evolve, we anticipate so will the operating models and technologies available to market participants, areas which may also be considered in determining an appropriate and sustainable gamer management approach.

For more information, please contact Tom Skomba, Consultant,, specializing in Commercial Payments and Financial Institutions.

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