Information Center – News and Articles about Credit Cards
Ezpreapproval.com presents the Information Center — a new and improved credit card news service. We will inform you with up-to-date articles on credit cards for good credit, bad or no-credit history. Get information on best credit card deals for student credit cards, cash back credit cards and business credit cards. Learn about the top deals on credit cards with the lowest APR deals and other hot issues.
Credit Card Deals Issuers' Competition Strategies
Healthy competition among credit card companies is aimed not only at providing benefit for the issuing side, resulting in the increasing amount of clients. Credit card holders also get profit from this economic phenomenon. On today's credit card market the constantly growing supply exceeds the demand. So, in order to win the hearts and wallets of credit card owners credit companies design new plastics and invent new perks and features. But what brand holds all the aces these days?
The recent 2007 Credit Card Satisfaction Study has shown that American Express outrivals all its competitors so far. AmEx credit cards are very popular with plastic owners. This one of the four financial giants payment system takes the first place and does not seem to give up its positions.
A curious fact is that less than a decade ago AmEx cards were far not so required by credit consumers. People with bad or bad/no credit history, as well as people with some financial problems would turn down credit card offers by this brand. The reason for that, as you guess, were unwarrantedly high interest rates and fees.
The thing is, when this credit card company was established and started issuing plastics, the competition on the credit card market was not so keen. And credit cards in the mid fifties were some kind of a privilege for quite prosperous people, that is why only those, who could afford paying high fees and rates could become credit card holder.
But with the rising amount of credit card offers people became more selective. No one wants to pay for extra charges. American Express, having realized that, reconsidered their policy terms and developed new more beneficial credit card deals in order to become more accessible to people applying for credit cards.
This was a strategically thought-out move that helped the company to regain customers' trust and attracts thousands of new clients.
The 5 basic characteristics credit card issuers compete in are: rates and fees, features and benefits, reward programs, customer service, and security level.
AmEx, according to the survey's results, outpaced its rivals in two aspects. This brand's benefits and features as well as protection level were second to none among the top 10 US credit card issuers. As for reward programs, American Express have staked on airmiles rewards, which are especially appreciated by business people and travelers, but not only by them.
However, Discover with its more enticing and profitable rewards programs firmly holds this field. But AmEx develops alluring offers for frequent flyers, thus becoming almost a monopolist in this sphere.
Safety and protection, as a rule, are not the key-factors in a credit card's choice, but American Express keeps track of the latest trends of security measures against identity theft and credit fraud. High-quality customer service and control over all stages of transactions made with credit cards are not overlooked by this payment system.
In general, as the conducted survey reveals, the two top US payment systems that approximately in equal parts share the leadership among consumers are American Express and Discover. Quite a surprising fact for Visa and MasterCard have a longer history and it is these two brands that are worldwide known and accepted.
Competition on financial market reminds natural selection. Only the strongest survive. Well, we will see if AmEx manages not to let anyone in on its area and remain the best species in the credit card kingdom.
Most credit tips say that the sooner you pay off your credit card balance - the less money you will lose on interest. On-time payments will favorably bound back on your credit score and payment history. This kind of advice is what we all are used to hear and read on the Web, in financial magazines, in tips columns. But does this financial behavior model really have a positive effect on your FICO score and credit report?
How can it be questioned, you ask? A perfectly disciplined plastic owner that pays off his or her balance before a lender could say Jack Robinson. Is not it any creditor's dream? No, it is not always so. Let's find out why a lender would want a different behavior model from a borrower and when this kind of paying down debts can weigh heavily against a cardholder.
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There are a number of embarrassing situations that are just a nightmare for cardholder. Feel no wallet in your pocket just before the cash register? See some unauthorized charges in your credit report? Loose you wallet with all your plastics in it? Very soon we are going to have no fear of these things, thanks to amazing technical progress.
Indivos Corp. which majors in computer hardware and software development has been working on an electronic system for making payments over a number of years. The thing about this system is that it enables transactions to be made by scanning customers' fingertips. A number of retailers have already expressed interest in testing the new system.
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Active credit card use is a sign of a society with well-developed market relationships. More and more people get involved in buying goods and services with plastics. Using virtual funds to make real purchases is very convenient. But this extended buying power has led Americans to a dangerous trend. Over 40% of American households, according to the USA Federal Reserve statistics, spend more money than they make.
In the average, every American of these 40% spends $1.2 per every $1 he or she earns. Plastics have changed people's spending habits. These plastic devices allow and encourage people to spend more and more money. Around 18% of all purchases made by Americans involve credit card use. About 24% of the purchases are made with other types of plastics.
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If you are determined to eliminate your credit card debts and you have good credit, getting a balance transfer card is a good idea. You can shift your credit card balances with high interest rate to a card with much lower rate or 0% APR at all. But there is one thing that can reduce your profit from this kind of a deal. It is balance transfer fee.
Most balance transfer cards come with a fee for a transfer. Not long ago you could easily find a plastic for balance transfers with no fee. However, due to the credit card market crisis and economy slowdown, lenders have pulled these deals from the market. And now it is rather hard for a customer to find a balance transfer card that comes with no fee. But there are some ways to negotiate a better balance transfer deal.
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