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?