Charge Card Mail Is Busting Out All Over

Many people discover a mailbox filled with credit card offers unappealing, but look at the bright side: It’s a sign the squeeze on consumer credit may be loosening. According to Bankrate, it’s as if the waves of recession are almost rolling back. Witness the numbers: from Q4 2009 to Q4 2010, credit card mail offers climbed from 551 million to 1.4 billion, says Mintel Comperemedia. Article resource – Recovery Watch: Credit card mail has increased dramatically by MoneyBlogNewz.

Credit standing out in the sea of offers

In order to attract consumer business, more credit card offers are trumpeting no balance transfer fees, no foreign transaction fees and extended low introductory rates. Waiving balance transfer charges is among the most popular features. Senior Vice President Andrew Davidson of Mintel told CreditCards.com that banks will do almost anything to grab the competitive advantage. According to a recent Bankrate study, 15 bank credit cards and 25 credit union credit cards eschew balance transfer fees. For banks that did charge interest on balance transfer charges in 2010′s fourth quarter, the mean rate was 3.06 percent.

Where credit cards come on top

Another area where credit card issuers compete for business is the foreign transaction (aka currency conversion fee) arena. While not as visible as Annual Percentage Rate, annual charges and balance transfer fees, foreign transaction fees are important to any person who travels, whether for pleasure or business. Most cards add a 3 percent surcharge for each foreign transaction, a tax that can add up easily. Last year a study conducted showed that over 90 percent of bank cards contain this type of fee. Now several large banks are waiving those transaction fees, for instance Citibank, HSBC, and Chase.

Extended introductory rates: another bonus

Banks now function in ways where they give bonuses for signing up such as extended introductory rates; some even go as low as zero-percent for the first year on their Annual Percentage Rate. Mintel reported the introductory rate was around 13 months for the fourth quarter of 2010. According to Davidson, that number is expected to grow.

“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.”

Legislation keeps charge card rates low

The Credit Card Accountability, Responsibility and Disclosure Act (CARD) is the primary reason that APRs continue to stay steady and low. Mintel reports that fourth quarters average Annual Percentage Rate 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/

Shop around for a better credit card than this

youtu.be/FunpS4QXcRI