Credit card mail may seem like spam, however it could be viewed as a sign that the consumer credit industry is beginning to loosen. According to Bankrate, it’s as if the waves of recession are almost rolling back. The Mintel Comperemedia study found that offers for new credit cards skyrocketed from 551 million in the fourth quarter of 2009 to 1.4 billion in the final quarter of 2010.
Just how credit offers stand out
In order to attract consumer business, more charge card offers are trumpeting no balance transfer charges, no foreign transaction charges and extended low introductory rates. Waiving balance transfer fees is particularly popular. Banks will go to extreme lengths just to get above the rest according to what Senior V.P. Andrew Davidson of Mintel told CreidtCards.com. Those banks last year that charged balance transfer charges, did it at a rate of only 3.06 percent, and about 40 banks and credit unions canceled transfer fees altogether.
Standing out above the crowd
The foreign arena or currency conversion charges are a big competitive area for charge card issuers. While not as visible as APR, annual fees and balance transfer fees, foreign transaction charges are significant to everyone who travels, whether for pleasure or business. The typical 3 percent surcharge on foreign transactions can cost quite a bit before the trip is over. Past year a study conducted showed that over 90 percent of bank cards include this type of fee.
HSBC, Chase, and Citibank; are a few the major banks that currently waive their foreign transaction fees.
Extended introductory rates: another bonus
Some charge card issuers push a zero-percent APR initially for some time, to try and get people to purchase into their card, this is often referred to as an extended introductory rate.
Mintel reported the introductory rate was around 13 months for the fourth quarter of 2010. However, that number is trending higher, claims Davidson.
“The squeeze on credit observed during mid-2009 is being reversed, and many issuers are now offering durations of 15, 17 or 18 months or more,” he told Bankrate. “We have even seen offers with 24- and 30-month intro rate durations in recent months.”
Low charge card rates can be attributed to legislation
The Credit Card Accountability, Responsibility and Disclosure Act (CARD) have helped stabilize credit card APRs. Mintel reports that fourth quarters average APR was 14.03 percent. “Many credit card companies have contrasted their APRs against the relatively high prime rate as a consumer draw,” said Davidson.
Articles cited
Bankrate
bankrate.com/financing/credit-cards/4-trends-in-credit-card-mail/
CreditCards.com
creditcards.com/credit-card-news/foreign-exchange-fees-going-up-1267.php
Pew Trusts
pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Credit_Cards/PEW-CreditCard FINAL.PDF
WhiteHouse.gov
whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/
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