During the recession, it's been hard to find credit cards with low rates and good perks. That may be changing. Here are some examples that you can capitalize on.
Back in March, we reported on the surprising news that credit card use was on the decline – 45 percent fewer cards were issued in 2009 than 2008, while debit cards went up by double digits. Perhaps concerned about those numbers, many credit card companies are now soliciting new business – which means you might be able to score a better card.
For starters, interest rates on cards are finally coming down. Last week, the national average was 14.35 percent, a drop from 14.62 six months ago, according to CreditCard.com. Not much help, especially considering that a year ago, rates were hovering around 12 percent. But it’s a good start – we reported in June that the Federal Reserve asked many card companies to “reconsider” their rate hikes. Somebody must be listening.
So this is as good a time as any to shop for a new card. A few tips:
- If you carry a balance, you want the lowest rate, preferably without an annual fee – check out various cards on our credit card comparison page.
- If you pay off your card every month, then rewards are more important than rates. Find a card with no annual fee and the best cash-back or rewards.
And speaking of rewards, now that card competition might be heating up, you might find some interesting incentives out there. Example: A new card from Chase recently came on the market called the Hyatt Card, which offers points for hotel visits but also entices with this: “After the first use of the credit card, members will receive, courtesy of Chase and Hyatt, two nights at any Hyatt anywhere in the world which are redeemable within one year.”
Even if you don’t care about this particular card, it’s hopefully a sign of better rewards to come from the competition. One news service is reporting that the Hyatt Card is aimed squarely at American Express cardholders. If true, consumers could benefit from a rewards war.
It may already be starting. The same day Hyatt and Chase announced their new card, two other partners were trying to steal some thunder by promoting a special deal. Owners of an ExxonMobile card can now “fill your plate when you fuel your car.” Here’s how it works: From now through the end of November 30, ExxonMobil cardholders who register at dining.exxonmobilcard.com will earn a $50 dining certificate if they buy 100 gallons of gas within 90 days of date registering. That certificate can be redeemed online at more than 15,000 restaurants and online merchants nationwide.
The Discover Card is also trying to get some love and attention, but instead of cutting rates or offering incentives, the company is touting better customer service. Discover Financial Services is launching a national TV ad campaign to get the word out.
“We believe that by featuring our promise to answer calls in 60 seconds or less by real people who are trained to solve problems on the first call, we will continue to differentiate ourselves to existing and prospective cardmembers.” says Julie Loeger, Discover’s senior vice president of brand and product management. “We believe, particularly at this moment in time, that customers are re-thinking what they look for in a credit card partner.”
Hopefully rates, rewards, and service will continue to move in the customer’s direction. That certainly hasn’t been the case thus far this year – check out How Credit Cards are Changing in 2010.