Credit Card Companies Reward Consumers Who Shop Around
With Ronald Reagan came mass deregulation in many industries. One
of the industries that benefited from deregulation was the
financial industry. As a result, hundreds of new financial
companies were introduced to the American consumer during the
1980’s.
With the sudden explosion of new competitors in this industry,
credit card companies began to struggle with how to retain
existing customers and to recruit new customers.
So, financial companies took their cue from the airline industry.
The airline industry had preceded the financial industry in
deregulation, and they had met the new increase in competition
with Airline Miles programs to encourage brand loyalty and repeat
customers.
Noting the successes in the airline industry, credit card
companies soon began to offer their own clients Airline Miles for
repeat business. But, Airline Miles were not attractive to the
whole of the consumer credit card market.
Credit Card Providers Upped The Ante
Once the credit companies realized that Airline Miles could only
offer them limited success, they began to spread their wings and
to offer additional credit card reward programs to their
potential customer base.
Banks eventually changed the name of their rewards from credit
card miles to credit card points to address the fact that
consumers could earn far more from their company than just free
travel. Consumers began to sit up and really take notice of these
new kinds of credit card offers.
Through the 1990’s and into the new millennium, consumers began
to find that most of the primary players in the credit card
market were offering various mixes of credit card rewards. The
most common credit rewards offered are still airline, travel,
gas, and cash-back rewards.
Other types of credit card rewards offered to consumers include
low-interest or 0-interest credit card balance transfers. Another
type of reward is 0-interest or low-interest borrowing for the
first six-months or one-year.
Credit Tip #1: Credit card balance transfers and early-bird
credit card offers such as the no interest for six months will
remain in effect for the full amount of time stated, so long as
all credit card payments are made on-time. A single late payment
on one’s credit card payment will likely be viewed as a breach
of contract, leading to a higher interest rate from the date of
the late payment or even from the credit card sign-up date.
Whatever you do, make all of your credit card payments on time
for the entire amount due according to your monthly statement.
Expanded Travel Rewards Brought Real Value to Consumers
Credit card travel points were a real blessing for ordinary
consumers. Family vacations are generally taken within 200 miles
of home, so most consumers would never use the free airline
travel offered with credit card miles programs.
Credit card points or travel rewards offered more options to
consumers as to how the consumer rewarded themselves for their
loyalty to the credit card company. In many cases, travel rewards
can be extended to include fuel, hotel rooms, attraction entrance
fees, and food at restaurants. As a result, consumers can expect
to utilize their travel rewards, even if they jump in the car and
drive down to the next major city.
Cash-Back Rewards Added A New Dimension To The Financial Game
Credit cards can be your best financial friend if you know how to
work the system.
Cash back rewards range from one- to ten-percent of the amount
spent on the credit card. Clever consumers make those cash-back
rewards really count by using them for all of their purchases.
One can start the month by putting their paycheck into the bank
and then use their cash-back credit card to pay for everything
that can be paid with a credit card through the month. This might
include groceries, food, fuel, utilities, car payments, house
payments, etc. As each credit card purchase is transacted, the
consumer should write down the amount of the expenditure in their
checkbook. Then at the end of the month, when their credit card
bill arrives, the consumer can write a check for the entire
balance of their card for that particular month.
This way, the consumer can maximize their cash-back rewards and
never carry a balance on their credit card. If one pays $3000 per
month in bills, and all of those bills can be paid with their
credit card, the consumer could very well receive an extra
$30-300 back from their credit card company.
Credit Tip #2: The added benefit of using this method of bill
paying is that you are building your credit rating as you pay off
the entire balance of the credit card each month.
Selecting the Right Credit Card Offer
Don’t be afraid to shop around to find the best credit card
offers. Before you begin your search, sit down and sketch out
some goals that you would like to reach using your credit card.
Perhaps you would like to transfer your credit card balance from
one high-percentage credit card to one with a lower interest
rate. Maybe you are more interested in the percentage value of
cash-back reward. You might want to get a credit card that offers
extra points or a credit card offer that will let you earn credit
card points towards the purchase of a Sony big screen television.
Whatever your financial goals might be, make sure you know what
they are before you begin your search.
On your first pass, eliminate the credit card offers that do not
provide the kinds of rewards that you are looking to achieve.
Your first selection round will generally narrow your field by
two-thirds.
Once you have knocked down the list of offers, then get out a
pencil and paper and develop a checklist that will allow you to
compare each offer side-by-side. This phase will let you
determine which credit card will best serve all of your desires.
Of course, you may have to make compromises with yourself, but
when you are done, you will have found the best credit card offer
for your situation.
If you have the bank’s brochure in front of you, it will likely
have a credit card application inside of it that you can fill out
and send in to the company. If you are relying upon credit card
applications by mail, make sure you keep your list handy until
you have gotten a card you are happy with using.
If you have an Internet connection, you will be able to shop a
huge variety of credit card offers. By following the method shown
above, you can make a good decision about the cards you want to
try to acquire, and you can file an online credit card
application with the expectation of getting an answer on that
card within just a few minutes. If you are turned down on your
top pick, then move on to your second top pick. By using the
Internet, you can actually reduce your credit card shopping time
by as much as weeks.
Copyright (c) 2007-2012 Braxton Heitz
Read Moor
http://readmoor.com/
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Braxton Heitz writes about family finances and the challenges of
finding a job in a rough economy. More of his articles can be found
at: http://ReadMoor.com/
