Paceline had an extremely lucrative credit card to a point that it was in my 2022’s “what card do I use?” list. It was very easy to earn 3% cashback everywhere and 5% cashback on groceries, pharmacies, and more (see Doctor of Credit or Frequent Miler for reviews). It also came with a free Apple Watch sign-on bonus in a form of a weekly rebate (subject to the user elevating heart rate for at least 150 minutes/week).
The signup bonus isn’t the best we have seen but it is fairly decent for a company issuing its first credit card. When new companies offer a large signup bonus, the miles and points community is quick to remind them what a terrible idea it is. However, this bonus lasted, perhaps because
(a) they were not bleeding cash at once (paying a whole bunch of $400 sign-on bonus at once ought to take a bigger hit on the balance sheet than paying a whole bunch of under $10 weekly credits)
(b) I assume there was a decent chunk who didn’t hit the weekly goal and missed out on credits at one point or another.
I think that when they created this card, they were banking on a lot of people doing what I mentioned in bullet point (b). The card came with a lucrative enough cashback program that it likely was the primary card for many of its users. After all, who doesn’t want to earn 3% cashback everywhere? They likely thought people would occasionally forget to meet the weekly goal and would only earn 1.5% cashback as opposed to 3%, thus making the card an occasional money maker. Additionally, the card came with a $60 annual fee which they assumed would help balance things out. And of course, they also hoped that some of the users would check out their other products.
But, like many before Paceline, they underestimated the miles and points community. I am willing to bet that a decent chunk of their users fell into the following two categories:
- People who recognized that the card was too good and abused it until they got banned (see Miles per Day as an example).
- People who recognized that the card was too good, used it as their daily driver card, and always met their weekly goal thus earning maximum rewards each week and getting Apple Watch rebates each week.
Yes, this is all speculation but it is a fun one to do. The not-so-fun part is that the card is practically getting suspended with less than a week’s notice.
I particularly liked the bit where Paceline says, “our current credit card program manager, RailsTech, Inc., is not able to achieve this vision, so we are parting ways.” Corporate pettiness is funny. Less than an hour later, RailsTech sends an email. I was lowkey hoping for them to throw some shade but all they said was to pay your bills!
Closing Thoughts
I very much doubt that Paceline will be back with anything as good of a card as they had before. I think they were just slow to figure out how much they were getting abused. Speaking of which, they are kinda abusing users back by ending rebate on 3/31/2023. If you are affected by this, go file a complain with CFPB (and maybe also keep tabs on comment section of this Doctor of Credit post).
