While not a new practice, rewards limits are becoming more prevalent, especially on the cards that promise the highest reward rates. There are four types of stated limits to look out for on your offers:
Annual rewards limits – an example of this would be the Citi Forward card, which limits you to 75,000 ThankYou Points in any given year
Monthly spending limits – The Chase Freedom and Discover More cards use this a lot. Their quarterly 5% cash back bonus promotions are usually capped, so you can only earn the max rewards on a few hundred dollars of spending each month.
Limits on bonus rewards – Only a subtle difference with the above, but some cards cap reward spending on very specific categories. This is a common feature of gas credit cards. Examples include the Costco TrueEarnings Amex, which only pays 3% on up to $3,000 in gas purchases each year.
Indirect limits through shorter expirations – A common feature of frequent flyer miles and other such loyalty programs, sometimes your accumulated rewards might expire after a certain amount of time, implicitly reducing your realizable rewards. For example, Citibank ThankYou Points expire after three years and BofA WorldPoints expire after five.
READ ARTICLE via 7 Ways Banks Will Limit Your Credit Card Rewards – MoneyBuilder – making sense of your finances – Forbes.
NOTE: Merchants and consumers pay these reward fees upfront as part of the merchant interchange SwipeFees, yet as you can read above, the banks and credit card companies pay out only a fraction of those prepaid reward fees.