Credit Card Issuers Dropping Some Fees
Big banks with their significant fees and high interest rates have become the villain of both Congress and consumers for the past few years. In 2009, politicians made major revisions in credit card practices with the CARD Act. More recently, angry consumers protested the monthly debit card fees with both a “Dump Your Bank Day” and a “Bank Transfer Day”, causing banks to rescind those fees.
Now, some banks seem to be trying to polish their tarnished image by dropping fees and increasing rewards.
Here are some changes that credit card issuers have made in 2011 that have been good for cardholders.
* Eliminating the foreign transaction fee
Last week, Discover dropped its 2% foreign transaction fee. Earlier this year, Chase dropped its 3% foreign transaction fee from their Sapphire Preferred. Avoiding the foreign transaction fee is a significant savings for travelers, but also for consumers who makes a purchase from another country or even a purchase that is routed through a foreign bank.
* Eliminating the balance transfer fee
Chase is now offering a new version of the Chase Slate card that does not charge a 3% fee for balances transferred during the first 30 days that the card is open.
* Increasing rewards
After the credit crash in 2008, credit card issuers cut back on the rewards offered to new cardholders. But in 2011, nearly every issuer has ramped up the rewards trying to attract new customers with good or excellent credit scores. Rewards are used to compete for new cardholders, as well as to encourage credit card spending and regular usage.
Some cards now offer an end-of-year bonus on points earned during the year. Capital One Cashoffers 50% cash back bonus on all you earn each year. Chase Sapphire Preferred offers 7% annual points dividend-earn points on your points.
Earlier in the year, there were extremely attractive airline rewards. In March, Capital One created a buzz with the heavily promoted “Match My Miles Challenge” where consumers could earn up to 100,000 miles by switching and spending on the Venture Card. Chase followed with a promotion on the British Airways card where cardholders could receive an extra 100,000 miles by becoming a customer and reaching a certain spending level. Issuers have also dangled generous cash back bonuses in front of potential customers. The Chase Freedom card offers a $200 bonus once a new cardholder spends $500 in the first 90 days. Similarly, Capital One Cash pays $100 for a new customer that spends $500 in the first three months.