Avoid the Pitfalls of Amway Visa Card From MBNA
Amway Global IBOs Are Misled by Brand Loyalty With Poor Rewards
Nov 2, 2009
Few consumers today would think of big banks as being fair or generous. After all, they are for profit companies that need to keep their payroll going as well be able to turn the lights on each day they open.
Knowing this, it wouldn't be a surprise if a large bank that had received $20 billion in bailout money earlier this year had found out about a group of consumers who were so committed to a brand that they could water down their rewards system simply by slapping the name of one company on the top left-hand side of one of their Visa cards.
Bank of America did, and the people they are exploiting are Amway Global's independent business owners (IBOs) who are well known for a brand loyalty that runs deep enough that they sell the products they buy to whomever they can; sometimes for a profit, sometimes for credit in the form of sales volume (also called business volume or BV) that will result in income for them in the near future.
How Amway Global Visa Rewards From MBNA Work
Amway Global IBOs are network marketing professionals who buy and sell products from the Amway Global Corporation based in Ada, Michigan.
IBOs earn percentages of their business volume based on the volume of products they move personally, or are moved within the groups of people who are also networking, buying, and selling with them. Included in these sales are credits for Visa usage from MBNA.
IBOs are credited with 3% on all things purchased on the Amway Global website, and 2% on products and services purchased at other retailers, in the form of business volume. So, if a person was to use this credit card to buy $700 worth of items through Amway Global and $300 worth of items elsewhere, he would be credited with $27 of BV for $1,000 purchased on credit.
It looks far superior to other rewards programs but these numbers, which appear to be a 2.7% value, are deceptive.
MBNA Rewards Program for IBOs is Not Competitive
After the $27 above is converted to BV for IBOs, it will then be further converted in the form of a monthly payout to the card holder, who is running a business for which this volume is credited.
IBOs at the Platinum level and above will receive a 25% commission (called a bonus) on all volume within their network, resulting in the reception of $5.40 in Visa rewards from MBNA, or just over half a percent.
If the low reward rate isn't bad enough, this money is subject to taxation because it's not paid out as a reward, but as income from having done business.
Other credit cards that offer cash back usually do so at a rate of 1% or more, and the money is not subject to taxation, because it's not considered income. If it was, then credit card companies would send income tax statements to the customers who receive them. The taxed rewards makes simple 1% cash back rewards more than twice as valuable as the Amway Global Visa card offered by MBNA.
Large companies, especially international multi-billion-dollar corporations, go through many phases in their lifetimes. In those phases, they move varying products and services. The ones that serve their clients best stay on until they can be replaced by something better, and the ones that are noticeably inferior are easily replaced by better products and services.
When it comes to the Amway Global Visa card from Bank of America, it seems that this alliance between the two companies is going to have to be renegotiated or replaced.
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