Why UK Financial Institutions are not as generous as the American ones?

jumperabv3

I have an American Airlines Citibank card, Mastercard (issued in the US) and when I got it I made purchases of over $3,000 with it to get 50,000 American Airlines miles (plus 3,000 miles for the purchases).
Every $1 of purchase = 1 mile.
On top of that when I redeem my miles, as long as I have this card I get 10% 'miles cashback' so if I redeemed 100,000 miles I would get 10,000 back.
1st year is free (I got it until June 2016 free) and if I want to continue it's $95/year which I'm not obligated to do.

This is all from the US.
Now - I also have an American Airlines MBNA card, I was entitled for only 5000 bonus miles (10x less) and here I need to spend 1 pound ($1.50) to get 1 mile with the Amex card, if I use the Visa then I need to spend 2 pounds ($3.00) to get 1 mile. Many retailers don't accept Amex by the way.

So why are the US counterparts much more generous?

simongregson

The merchant fees that can be charged by the card schemes are going to be capped in the EU soon, this means that the rewards that cards offer will be more limited (but in theory merchants have lower costs and therefore lower prices). American express cards are exempt from the new cap.

There is also probably more competition in the US market, and I suspect more customers carry a balance and pay interest which helps to fund the rewards and bonuses.

SW17

Even before the EU capping, merchant fees in the US are often considerably higher than the UK, allowing card issuers to be more generous with benefits. The point about more people carrying interest-generating balances may also be contributing, though I don't know the facts on that.

PeacefulWaters

It's got everything to do with the USA having a massive internal market for domestic air traffic.

christaitfife

When I lived in the US I had to pay my bank for everything. Cheques, statements, ATM use (mini statements... everything), transfers... everything. I did, however, get very good 'extras' like lounge access at airports, insurance and even '24/7 telephone non-commercial legal assistance; (only in America). Now in the UK I pay nothing for my account and get nothing back... I think the value equals itself out.