Some watchers of the credit card industry predicted dire consequences if Congress passed the financial reform bill, claiming that issuers would recoup their losses by changing fees, charging more for issuing cards and cutting back on rewards. While the first two predictions appear to have been borne out, it seems that credit card companies aren’t ready to cut into rewards just yet.
Rewards are one of the primary marketing tools that issuers can use to get new customers, and every company wants to claim as big a slice as possible of each new year’s crop of recent high school and college graduates. Airline miles, free trips, cash back and discounts have all lured in new cardholders, and the issuers are loath to give up such a compelling tool.
In the second quarter of 2010, American consumers received 1.1 billion credit card offers, according to figures from Mintel Comperemedia. In second-quarter 2009, that number stood at just 419 million. In addition, over 800 million of those offers included rewards programs, some with relatively generous terms.
Annual percentage rates have risen, but Mintel says that competition is now driving them back down, to an average variable APR of 13.79 percent.
It appears that for the savvy, responsible customer able to stay out of debt, there are still compelling benefits to be gained from certain cards.