What credit card deals are issuers giving away to attract new cardholders?
Rather than writing an article on how to look for good credit card deals (which will probably take up lots of pages), I've decided to look at what credit card deals are card issuers offering to gain new customers. I expect to find some interesting strategies since the credit card space is so competitive. With that in mind, let us take a look at some credit card deals and strategies that card issuers are using today.
First Year annual fee waiver - The consumer credit card industry is so
competitive these days that most credit cards do not charge any annual fee (we're not talking about sub-prime cards). However, some issuers like American Express still charge annual fees on their charge cards. To entice new customers, American Express has been offering a first year annual fee waive on their American Express Rewards® Gold Card and the Gold Delta SkyMiles® Credit Card from American Express
0% introductory offer - This is such a common strategy with every credit card
these days. Nearly all credit cards offer some form of 0% introductory apr for a certain period for either balance transfers or both.
Introductory Bonus Points - This strategy is almost universal in the airline and hotel credit card segment. When you apply for a new airline or hotel credit cards, you will almost be certain to be given a decent number of points after you make your first purchase. Whether or not this is a useful strategy is
uncertain. Afterall, I would think that if you were a member of a particular frequent flier or frequent guest program and wanted to get that particular credit card, you would do so whether or not there was any
introductory bonus points?.
Earn more points/rebates for the certain period - The Citi® Driver's Edge® Platinum Select® Card
for example uses this strategy. For the first year, they allow cardholders to earn a whopping 6% rebates on "everyday purchases", which is a tad better than the best cash rebate credit cards which offer 5% rebates for these types of purchases. After the first year though, you earn 3% rebates on these "everyday purchases".
This strategy is used by almost all gas credit card issuers. For example, the Hess Platinum Visa® and the Marathon® Platinum Mastercard® from Chase all allow new cardholders to earn a whopping 10% rebates on gasoline purchases from their respective stations for 90 days. After 90 days, the rebates go back to their usual 5% level (which is still a very good rebate payout).
Free? Gifts - Some credit cards offer "free gifts" to try to gain new customers.
Very often, these "gifts" aren't exactly free. Neither are they are best quality. Let's take a look at a couple of examples. An old catalog card that we used to offer on this site (called the Centra Platinum) offered new cardholders a "free new computer". Turns out it was not exactly free as new cardholders had to pay $178.97 in shipping fees! Furthermore, more detailed investigation of the specs of the computer was not of the latest model
and would probably not even run a Windows XP!.
Unsecured Cash Loans - Many subprime credit cards offer new cardholders a
"potential" avenue to get a cash advance payday loan of up to $1,500. Basically, once you are approved of the
card, your details wills be sent to a few competing companies and you "may" be entitled to get a cash advance
loan. The Liberty Union Prepaid Visa Debit Card
and Prime Mutual
are examples of cards which have these offers.
Automatic/Free Memberships - I found a couple of subprime cards that offer free memberships to Travel Clubs. For example, the Executive Plus Prepaid MasterCard® Card
allows you to enroll in a free membership of "Travel Group". This membership claims to give free 3-days, 2-nights accomodation of your choice in over 20 cities and ove $1,000 in travel vouchers.
The New Millennium Bank Card offers automatic enrollment in TheWorldsBestTravelClub.com, which gives members special discounts on airfares and hotels. You also get a FREE companion ticket after card approval if you buy a roundtrip ticket (from API) within the Continental US with a minimum ticket price of $349.00 (during
low season 9/15 to 1/15) or $379.00 (during high season 1/16 to 9/14). This promotion alone will probably
recoup both the one-time application fee and first year annual fee.
Lucky Draws or Sweepstakes - From time to time, credit card issuers will have a sweepstake promotion. The recent fad has been to give potential cardholders a chance to win an Apple IPOD. Everyone seems to be thinking about giving away a free IPOD. In season 3 of the Apprentice series, team Magna thought of it during their promotion of a coffee brand. Earlier in 2005, American Express ran such a promotion for their Blue and Blue Cash Card. At this moment, Wired PlasticTM Prepaid Visa® Card is holding a weekly sweepstake for new cardholders and giving away an IPOD.
The Eufora� Prepaid MasterCard®
has taken the up the ante on sweepstake promotions by offering a monthly sweepstake promotion
for current cardholders. The prize is a new automobile.
Final Note : - For the most parts, you should not be choosing a credit card based on just introductory offers given to you. Rather, you should see if the credit card is appropriate for your circumstances. But I feel it is nevertheless good to know what credit card deals issuers are giving to get new cardholders. I will update this article when new marketing strategies appear. I hope you enjoyed this article as much as I enjoyed researching and writing it.
Check out our Editor's Choice List for our recommended credit cards in various categories and the "best credit card deals"
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