Credit Cards Balance Transfer war in the U.S.

January 12, 2011

For the first time since the financial crisis, credit card issuers in the U.S. is more than willing to lure cardholders with attractive credit card balance transfers offer.

During the financial crisis, 0% balance transfers offer was hard to come by and if available, only limited to 6 months.

However, credit card issuers is taking the extra initiative in the new year 2011, immediately after the Christmas season, expecting there might be cardholders overspend and need some relieves to their accumulated debts.

The balance transfers war caught fire in the early January 2011 when Chase introduced 18 months 0% balance transfers and purchases with Chase Slate Card.

Before the war started, Discover More Card is the leader in 0% balance transfers with 18 months offer. Now with the game heating up, Discover More Card matching if not exceeding their rivals by offering a range of limited time promotion(valid through February 28, 2011).

With the new promotion, it once again taking the lead with 24 months 0% balance transfer offers.

More significantly, one of the Discover More Card is offering “No Balance Transfer Fee” on 0% balance transfers for 12 months, which is not available ever since the financial crisis. In fact, the balance transfer fee has been increased to as high as 5% after the financial crisis.

To fully take advantage of the balance transfer war, cardholders are encouraged to pay off the debt within introductory offer period. Even if it is not possible to pay the balances in full within the introductory offer period, it is to your advantage to put extra efforts in paying as much as possible in the given period.

Go here now to compare for the best balance transfer credit cards.


The US Credit Card Issuers Adopting Relationship Banking

August 20, 2009

Looking for better rewards or offers on your credit card? Then look no further than the bank where your checking account exist.

Relationship banking has been practised in Germany for years when it comes to credit card. Know as Girokonto Kreditkarte, a free credit card is attached when you open a bank account.

At times, a rewards program is attached such as one found in DKB Visa Cash Card. Instead of creating their own rewards program, the issuer prefers to work with established rewards program, card4you which has over 7,000 existing partners.

Such trend is nothing new and has been adopted worldwide. In Asia, the credit card issuers have a tendency to offer credit card to their existing bank account holders. In Australia, a more favorable credit card offers is extended to their existing customer.

Finally, major banks in US are learning the rope themselves. Those with checking account at the bank are likely to find better credit-card deals now.

Under Chase Card Services’ Chase Exclusives program, for example, Chase Freedom cardholders who also have checking accounts at the bank can earn up to 10% more points on their spending.

The bank also rolled out a new credit card, “Slate From Chase,” that automatically refunds the 12th month’s interest charges each year if customers enroll in the bank’s AutoPay program from a Chase checking account.

On the other hands, Citi with a presence worldwide, is offering some customers an additional 2% cash-back bonus on qualified spending on Citi credit cards if customers also have a banking relationship at the company.

Moving forward, relationship banking will be the backbone of credit cards, especially those with bank accounts in the bank.

First, those with bank accounts means they have the money to spend and ability to pay for their credit usage. This is increasingly important factor as the unemployment threat no longer makes the credit ratings/scores accurate.

The creditworthiness based on credit history is now obsolete; thus a new, safer method to gauge a person credit is required. So what is clever way than knowing your prospect has money in your bank?


Financial Mismanagement Main Reason for Credit Card Debt

June 17, 2009

With the recent 26-year high U.S. jobless rate of 9.4% in May 2009, it is easy to blame job loss as the main culprit for increasing credit card debt.

However, according to nonprofit NFCC(National Foundation for Credit Counseling) which helping financially desperate consumers, financial mismanagement is the main cause of financial distress. And job losses came in only second.

The number of people seeking help increase double-fold from 1.5 million in 2006 to 3.2 million in 2008.

What is more disturbing is people who seek counselling with NFCC had six credit cards with unsecured debt totaling 62% of their total household income. Be reminded that this debt is strictly credit card debt, not taking into account of their house or vehicle loan.


U.S. Credit Cards Charge-off Rate Rise in May

June 16, 2009

Capital One said the annualized net charge-off rate for U.S. credit cards, debts the company believes it will never collect, rose to 9.41 percent in May from 8.56 percent in April.

This trend is followed by every other major credit card issuers in US, which are reporting high and rising default rate.

This is lead by Bank of America reporting high charge-off rate of 12.50% in May, follow by American Express 10.4% charge-off in the same period.

Meanwhile, Citigroup the largest issuer of MasterCard branded credit cards reported charge-off rate of 10.50% in May. For record, Discover charge-off rate increased to 8.91% in the same period.

The spike in credit cards default in US is inline with the recent announced U.S. jobless rate in May, which rose to a 26-year record high of 9.4%.

The delinquency rates, an indicator of future credit losses, fell across the industry though. However, the delinquency rates is expected to rise in coming months. Analysts believe the decline was due to a seasonal trend, as consumers used tax refunds to pay their debts.