Rewards Return for Some Credit Cardholders

Rewards Return for Some Credit Cardholders
Photo (cc) by danxoneil

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The past three years have been a roller coaster ride for most credit cardholders. New federal regulations and financial reforms have been passed to supposedly benefit consumers, but issuers have made up for lost revenue by countering with increased fees and higher interest rates.

It seems most credit cardholders may actually be worse off after all these new “protections” – unless you’re a consumer with an excellent credit score. These consumers are being offered some very attractive perks as issuers fiercely compete for their business.

“It has been several years since banks dressed up their credit cards in generous rewards to attract the attention and applications of potential cardholders,” says Bill Hardekopf, CEO of and author of The Credit Card Guidebook. “Maybe this is another sign that lending is returning back to normal, at least for the top segment of borrowers. Issuers are competing again and using the best reward offers we’ve seen since 2008.”

Enhanced credit card rewards in 2011

  • Chase added a new version of Chase Freedom Visa with $150 cash back bonus after you spend $500 within the first three months of the account opening.
  • Discover added Double Cashback Bonus (2 percent) on up to $500 in purchases throughout your birthday month (or the month that you enroll, whichever is later). This is offered with most Discover cards, but you must sign up to get the Double Cashback Bonus.
  • Chase is offering a limited-time incentive where new cardholders can earn 100,000 miles with the British Airways Visa Signature Card. New card members receive 50,000 bonus British Airways miles after their first purchase and another 50,000 bonus miles after spending $2,500 with the card during the first three months.
  • Capital One just ended its heavily promoted Match My Miles challenge on the Venture Card. It matched up to 100,000 miles a consumer had in any airline credit card rewards program once the new cardholder spent $1,000 in the first three months on the card.

Other generous reward offers

  • Chase offers $50 cash back and 25,000 bonus miles after the first purchase on either the Continental Airlines OnePass Plus Card or the United Mileage Plus card. You also get a $50 statement credit after your first purchase. The One Pass Plus card also offers 10,000 annual bonus points if you spend $25,000 during the year. However, there is an $85 annual fee for One Pass Plus and a $60 annual fee for United Mileage Plus.
  • The Citi Gold/AAdvantage World MasterCard gives a new cardholder 30,000 miles on American Airlines after $750 in purchases during the first four months. The $50 annual fee is waived for the first year.
  • Chase offers 10,000 bonus points after you spend $500 in the first three months with the Sapphire card.
  • Bank of America’s Accelerated Cash Rewards American Express card offers a $50 statement credit if you make at least $50 in retail purchases within the first 60 days of the account opening date. Get an additional $25 statement credit by making a qualified purchase at Home Depot, Costco, or The Cheesecake Factory.

Other cards increase interest rates and fees

Not all changes have been increases in rewards and bonuses. Credit card issuers have also hiked interest rates and fees on some cards during 2011.

  • Chase raised the annual fee for the Sapphire Preferred card from $85 to $95.
  • Citi increased the interest rate in the lowest tier for college student cards. The rate jumped from 12.99 percent to 13.99 percent.
  • Citi cut the intro rate for balance transfers from 18 months to 15 months for the Citi Dividend Platinum Select.
  • Discover decreased the cash-back bonus for Discover More. It now offers a $50 cash-back bonus if you make $250 in purchases during the first three months. The old offer was $100 if you made $500 in purchases during the first three months.

“Credit card issuers continue to search for the right recipe that will attract their ideal cardholders,” Hardekopf says. “Judging from the rewards, they are competing for people with good incomes and high credit scores who frequently put purchases on their credit cards.”

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