In order to gain your attention, credit card issuers are competing vigorously this year in the wake of the recent recession. You won’t believe the offers they’re making, and it doesn’t appear as if it is going to stop any time soon.
Just about every card on the planet has some kind of reward to entice new customers, and if you have excellent credit, you can rake in a bundle.
But “excellent credit” is the key here – if you’ve been late on payments or have maxed out your card or have been applying frequently for new credit, you’ve probably struck out. Credit card issuers like to see a credit score at least approaching 700, which means you must show good behavior over the past year or so.
That aside, the cause of all this commotion in the card industry is the fact that the economy is doing better, more people are employed, and card defaults have dropped off at an unprecedented rate. Last year, card defaults were even lower than before the recession started back in 2008 – meaning that more Americans are paying back their debt, in fact, they’re been on a low-credit diet, and now banks are ready to break the fast by offering some great deals. They will continue to do this at a frantic pace with some of the new payment methods and technology that is being seen in the marketplace.
Keep this in mind, however: the major card issuers want you to spend more to receive your bonus. This may be an effort to ward off those who are only applying because of the bonus, who will apply for several cards at once, and stop spending on them once the bonus is received.
The bonus offers are tailored to the type of reward you’re looking for – travel, hotels, business, ordinary daily spending, entertainment, books, etc.
Here are some examples of the bonuses being offered:
Airlines – Chase Sapphire Preferred offers 40,000 Ultimate Reward Points after you spend $3000 in 3 months, worth $500 in travel, plus a dividend at the end of the year.
Hotels – Starwood American Express offers up to $575 in sign up bonuses.
Business Spending – The Chase Ink group of cards offer three categories of cash back rewards, from 5% on office supplies, cable and telecom services, 2% back on gas and dining, and 1% back on everything else.
Ordinary Daily Spending – American Express Blue Cash Preferred earns 6% at grocery stores, 3% at gas stations and department stores, 1% elsewhere.
Entertainment – Citi Forward earns 5% on dining, books, music and books.
For those with only average credit, Capital One Cash Rewards offers 0% APR until March 2013, with 1% cash back on all purchases. Don’t do cash transfers or cash advance, as APR is very high.