Are your bank card factors protected from the Silicon Valley Financial institution fallout?

Following final week’s fallout from the failure of Silicon Valley Financial institution, often called the “Startup Financial institution,” one more financial institution has failed, together with the stocks of other banks. This begs the query of what the potential impact, if any, it should have on factors and miles.

It is dangerous information for individuals who beforehand held their cash at SVB. Their third-party processor not has the potential to course of funds, stopping the financial institution and, thus, shoppers from briefly accepting funds and due to this fact processing bank card transactions routed by means of SVB.

That is actually alarming and a possible future case examine within the enterprise of deregulation and lack of oversight with youthful industries equivalent to startups and cryptocurrency. Nonetheless, it is vital to do not forget that most individuals don’t course of bank card transactions by means of the banks in query.

Sheila Bair, former chair of the Federal Deposit Insurance coverage Company, advised The New York Times that she did not “suppose that this is a matter for the large banks — that’s the excellent news, they’re diversified.”

Bank card transactions, for most individuals, don’t happen by means of the failed banks. Most transactions for everyday credit card users stay routed by means of banks strictly regulated and guarded by america Federal Reserve System.

That is evidenced by the flattening out of JPMorgan Chase & Co., Wells Fargo & Firm and Citigroup Inc. shares on Friday following only a slight stoop within the days prior, per the New York Instances.

The Instances cites extra “stringent” capital necessities, “far broader deposit bases than banks like Silicon Valley, which don’t appeal to lots of retail prospects,” and a risk-averse method to the property in query, like crypto, as the rationale.

There have been impacts to a couple packages factors and miles fanatics might know:


Plastiq has briefly suspended all funds to all distributors within the U.S., plus another nations, following SVB’s collapse. Since Plastiq relied on SVB to course of funds, they’re not to course of funds. Plastiq seems to be making an attempt to arrange an settlement with one other processor.

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As first reported by Frequent Miler, Plastiq customers are receiving an error message upon making an attempt to schedule cost:

We’re experiencing a processing error right now and are briefly suspending funds to distributors within the US and some different nations. We’re engaged on this difficulty and hope to have the ability to course of this cost once more quickly. For now, we recommend sending your cost by way of an alternate means.


Following Plastiq’s arduous cease, varied shops, including CNBC, documented portfolio corporations following the recommendation of their enterprise capital corporations to go to an alternate cost processor named Brex to discover a new house for his or her “billions of {dollars}” after withdrawing funds from SVB.

Brex is a Fintech startup out of, you guessed it, San Francisco, recognized throughout the factors and miles world for providing a 110,000-point sign-on bonus for brand spanking new small-business checking accounts in 2021, according to Award Wallet.

Moreover, Brex offers a no-annual free rewards card linked to the aforementioned checking accounts, providing 8 factors per greenback on ride-hailing providers, 5 factors per greenback on journey and 4 factors per greenback on eating places.

Sadly, again in August 2022, Brex closed all small enterprise accounts.

Now, Brex has dramatically devalued its reward factors, particularly reducing money and crypto redemptions to 0.6 cents per greenback from money again as an alternative of 1 cent per level in worth.

The large (destructive) information for factors and miles fanatics is that Brex has decreased its Brex Rewards level switch charges to airline companions by greater than 40%. Brex Rewards factors not switch to its seven airline companions at a 1:1 switch ratio. You now have to switch 1,670 Brex Rewards factors for 1,000 airline miles.

Because of this Brex accountholders need to switch 67% extra Brex Rewards factors to obtain the identical variety of airline miles whereas slashing money and crypto to 0.6 cents per level for a 40% devaluation general for Brex Rewards level redemption choices, as summarized by Award Pockets.

For the foreseeable future, you will get one of the best worth in your Brex factors through the use of them at 1-cent-per-point worth for bookings by means of the journey portal and reward card redemptions.

The knowledge for the Brex card has been collected independently by The Factors Man. The cardboard particulars on this web page haven’t been reviewed or supplied by the cardboard issuer.

Backside line

As of March 13, three banks within the startup area have failed to remain afloat, the third being Silvergate, which really fell earlier than SVB on March 8, notable for its community permitting crypto switch in real-time.

Consequently, the FDIC took management of SVB’s property on Friday, marking the second-largest financial institution failure in U.S. historical past and the most important because the 2008 international monetary disaster.

“The U.S. banking system stays resilient and on a strong basis, largely attributable to reforms that had been made after the monetary disaster that ensured higher safeguards for the banking business,” the FDIC, Federal Reserve and Treasury Division stated in a joint statement on March 12. “These reforms mixed with at the moment’s actions reveal our dedication to take the mandatory steps to make sure that depositors’ financial savings stay protected.”

Whereas the impact on factors and miles to date has been minimal, you can not use Plastiq proper now for bank card transactions.

What’s maybe extra regarding is the devaluation of Brex Rewards factors, which may set a precedent for devaluing bank card factors sooner or later.

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