Why Do Americans Get All the Good Points Deals?

If you've ever ventured into the world of online points and miles communities, you've likely experienced a familiar pang of envy. American members casually discuss earning 100,000 bonus points from a single credit card sign-up, stacking multiple cards to accumulate millions of points annually, and redeeming them for round-the-world business class adventures.

Meanwhile, back here in Britain, we're celebrating a 25,000 Avios sign-up bonus and counting ourselves lucky if we manage to scrape together enough points for a weekend in Barcelona. The disparity isn't just noticeable, there's a chasm between the two countries.

A quick comparison tells the story: whilst the British Airways American Express offers 25,000 bonus Avios after spending £3,000 in the UK, the Chase Sapphire Preferred in the US offers 60,000 bonus points after spending just $4,000. The American Express Gold Card gives UK customers 20,000 Membership Rewards points; its US counterpart offers 60,000 points with a stronger earning rate on dining and groceries. It's enough to make you wonder: why do Americans get all the good points deals?

I'd faint at 400,000 miles

The Economics Behind the Generosity

The answer lies in the economics of the credit card industry, and it starts with what consumers are willing to pay. American credit cards routinely charge annual fees of $250 to $895 (£195 to £675), and consumers pay them without batting an eyelid. The American Express Platinum Card costs $895 annually in the US; the UK version is £650, which sounds comparable until you realise the US card comes with vastly superior benefits and earning rates.

Premium cards like the Chase Sapphire Reserve at $795 per year have millions of cardholders. In Britain, anything over £200 is considered expensive, and most consumers baulk at fees above £300. This willingness to pay high annual fees gives US banks a larger revenue pool from which to fund generous sign-up bonuses and rewards.

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But the real money isn't in annual fees, it's in interchange fees. These are the charges that retailers pay every time you swipe your card. In the United States, interchange fees average around 2% of the transaction value, and can go higher for premium cards. Card issuers keep a substantial portion of this fee, creating a lucrative revenue stream with every purchase. In the UK and broader European Union, interchange fees are capped at 0.3% for credit cards and 0.2% for debit cards thanks to regulatory intervention. This regulation was designed to protect merchants and consumers from excessive fees, but it had an unintended consequence: it decimated the revenue that card issuers could use to fund rewards programmes.

The maths is straightforward. An American spending $50,000 annually on a premium credit card generates roughly $1,000 in interchange revenue for the issuer. A British customer spending the same £50,000 generates only £150. That's a difference of over £800 per customer per year in revenue that US issuers can reinvest into sign-up bonuses, ongoing rewards, and premium perks. When you have seven times the revenue per transaction, you can afford to be seven times more generous with rewards.

Competition Drives Innovation and Value

The structure of the US credit card market amplifies these advantages even further. America has fierce competition between major issuers, Chase, American Express, Citi, Capital One, Bank of America etc all vie aggressively for customers. This competition manifests in escalating sign-up bonuses, innovative earning categories, and premium benefits designed to poach customers from rivals. When Chase launches a new card with a 75,000 point bonus, American Express responds with an 80,000 point offer on a competing product. This arms race benefits consumers enormously.

Sadness.

The UK market, by contrast, is far less competitive in the premium credit card space. American Express dominates the rewards card sector with limited serious competition. Barclays offers the Avios Plus card, and a handful of other banks dabble in rewards, but none compete at the level of intensity seen in the US. Without competitive pressure, there's little incentive for issuers to push boundaries on rewards or bonuses. Why offer 60,000 bonus points when customers will sign up for 25,000? Why provide premium travel benefits when there's no rival card threatening to steal your customers?

This lack of competition extends beyond cards themselves to the broader ecosystem. The US has multiple transferable points currencies - Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Points, Capital One Miles, and Bilt Points all allow transfers to airline and hotel partners. This gives consumers flexibility and negotiating power. In the UK, we essentially have American Express Membership Rewards and the minnow that is the HSBC reward point scheme. This limits our options and the competitive pressure on programmes to offer value.

The US market also benefits from population scale. With 340 million people compared to the UK's 77 million, American issuers can spread their fixed costs across a much larger customer base, experiment with niche products, and still achieve profitability. A card that appeals to even 1% of the US market reaches 3.3 million potential customers; the same percentage in the UK reaches just 670,000. This scale allows for more innovation, more competition, and ultimately better deals for consumers.

Conclusion

The gap between American and British points deals isn't arbitrary or unfair—it's the predictable outcome of different regulatory environments, fee structures, and market dynamics.

Americans pay more in annual fees, merchants pay more in transaction fees, and fierce competition between issuers creates an arms race of rewards that benefits consumers. Meanwhile, British cardholders enjoy the consumer protection of capped interchange fees and lower annual costs, but pay for it through diminished rewards and bonuses. There's no villain in this story, just trade-offs. European regulators prioritised protecting merchants and keeping costs down; American regulators allowed market forces to prevail, creating a high-fee, high-reward environment. Neither system is objectively better—they simply optimise for different outcomes.

So the next time you see an American bragging about their 150,000 point sign-up bonus, remember they're also paying $895 annually and their local coffee shop is paying 2.5% on every transaction. The grass isn't necessarily greener; it's just a different shade of expensive.

Sam

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