Refer a Friend and Make Money… Credit Cards Finally Pay You

By: Roger A Lee

It pays to have friends. And these days, the more friends you have, the more cash you can receive or miles and points you can score from your favorite credit card company, retailer or travel rewards club.

While refer-a-friend programs have existed for decades in various industries, financial services companies have been slow on the uptake.

One of the newest financial companies to take that tack is Discover, which in the summer of 2011 launched a refer-a-friend program, while also tapping into the power and popularity of social media. Through the program, if you're a Discover cardholder, you can refer your friends to the credit card company using email, Facebook or Twitter.

If your friend applies for a Discover card and is approved, you'll receive either a $50 cash-back bonus or 5,000 airline miles, and your friend will get $50 cash back if she makes a purchase during the first three months she has the card. The rewards are good for a staggering 100 friends a year, giving you the potential to earn big bucks through the program.

The company is not alone. Retailers such as REI and Gymboree offer cash or gift card bonuses if you refer a friend for a store-brand Visa card, and your friend is approved

If you have a U.S. Bank FlexPerks Visa credit card, you can snap up bonus miles for referring a friend, while several prepaid credit cards offer you cash if you refer a friend and he signs up for a card.

On the travel front, companies such as Marriott offer bonus points if you refer a friend and they stay at a Marriott hotel.

One of the longstanding proponents of such programs is Amtrak, which started offering a referral program in the mid-2000s. To compete with the airlines, the railroad has a Guest Rewards program, under which travelers can chalk up points and earn free Amtrak travel, hotel stays, car rentals and similar perks. Referring a friend to Guest Rewards and having them join up will earn you 500 bonus points if your friend travels via Amtrak within 90 days of joining the program.

By offering such a program, along with the opportunities to earn extra points through referrals to friends, you're trying to give the customer that added value, which might prompt them to take the train rather than fly.

Discover has had a similar experience, because card members are always excited to have additional ways to earn rewards.

As traditional marketing channels become less popular, and consumers spend more time online interacting with family and friends card issuers expect referral programs to become increasingly popular.

For their part, companies want to be looked at "like a friend," and they're really trying to get into the networks of their customers and serve them well.

Be a smart consumer and turn the tables on credit companies start earning money from them instead of paying them all the time.

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Barry Norman is a contributor to and blogger at For over ten years has provided consumers free information helping them make sense of credit cards and the financial industry. Whether you are a longtime cardholder or looking for your first credit card, can help you make informed credit decisions.

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