Things have changed for credit card companies, with the new laws put in place to protect consumers. No more retroactive interest, outrageous late or over limit fees or double-cycle billing, which is great news for consumers. Another restriction on credit card companies is the way they can lure customers - good news for you if you're trying to get the most out of your plastic. Companies are forced to get creative to attract new customers, so card perks are getting more interesting, particularly for those with good credit. Here are five ways credit card companies are wooing new cardholders. (For more, check out Everything You Need To Know About Credit Card Rates.)
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- Zero Percent Introductory Rates
When the credit card law changes were first announced back in 2009, analysts predicted that perks like 0% introductory rates would disappear. Not so - with the low prime rate, cards with that nice "teaser" rate are still being offered by many companies. There is a catch, however: your credit had better be excellent to qualify for that zero-interest card. If you're looking to transfer some balances to save money, Citi's Platinum Select Visa or Mastercard offers 0% interest on balance transfers for the first 18 months - great if you're planning to pay that debt down fast, and want to avoid interest charges in the meantime. (To learn more, see Shuffle Away Your Debt With Balance Transfers.)
No matter how nice some perks are, sometimes only cash will do - and credit card companies know we love those cash back perks. Your existing cards may already offer cash perks, though cash back bonuses are greatest for new customers. Take Chase for instance: you can earn $150 cash back if you spend $500 during the first 3 months you hold their Freedom Visa card. BankAmericard gives you a $50 statement credit once you spend $100 during the first two months, and both Discover and Capital One combine cash back bonuses with zero percent APR for a year, in case you want to double your benefits.
Love to travel? There are a plethora of cards that let you collect airline miles - great if you're a frequent credit card user anyway, and want to save up miles for that dream trip. There are lots of cards to choose from, with some like Chase Sapphire even offering enough miles for a ticket if you spend $3,000 during you first three months. Here's the catch: most cards that offer these airline mile perks charge an annual fee after the first year, ranging from $50 to a whopping $450 for some cards. Want the miles but not the annual fee? Try the Capital One VentureOne or BankAmericard Power Reward cards; both also offer 0% introductory rates, in case you carry a balance you would like to transfer. (For more, check out 10 Reasons To Use Your Credit Card.)
- Student Cards
College students used to be the bread-and-butter for many credit card companies, since they carry balances for most of their college years - balances that carry hefty interest charges. The new credit card laws prohibit some of the predatory ways card companies were pursuing students, although many still offer cards specifically designed for students. Aside from the usual cash back rewards, some cards like the Capital One Journey card help students build credit by rewarding them when paying on time. If you're a parent or college student trying to avoid carrying a balance, consider many of the low-fee prepaid cards that allow you to pay bills, and even get a prescription discount for some. (To learn more, see 6 New Changes To Student Credit Cards.)
- Store Discounts
If you're credit-savvy, you probably know that store cards are usually not the best for your credit score. These cards tend to carry high rates and don't offer many perks - but there are some new exceptions to the no-store card rule. Target recently started offering its store REDcard holders a 5% discount on every purchase; Shell offers a five cent a gallon discount once you gas up 45 gallons using your Shell credit card. If you're a frequent shopper at any particular store, check out any perks their cards may offer - just be sure they really benefit your bottom line.
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The Bottom Line
Before you fill out those credit card application forms, check with your existing cards first. If your account is in good standing, you may be able to negotiate a reduced rate, airline miles, points or other perks simply by calling and asking for it. Remember that applying for a new account will give your credit score a temporary ding, and will increase your borrowing limit, so consider the implications if you do go ahead and get one of these cards with perks. If you're in the market for a new card and have good credit, the potential benefits have never been better. (For an indepth look at credit cards, check out our Credit Cards Tutorial.)
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