Photo: Stuck in Customs
If credit card companies’ behaviour in the last quarter of 2011 was any indication, lenders are working hard to attract new fiscally responsible customers as they drive out poor credit consumers with fees, according to a new report by Cardhub.com.The Credit Card Landscape Report examined 1,000 credit card offers and found credit card companies were more than willing to extend 0% introductory rates for new customers in the last quarter of 2011, and offered 60% more cash back rewards offers.
The Citi Platinum Select MasterCard and Citi Simplicity Cards were top of the heap when it came to extending 0% introductory APR rates, which lasted for as many as 21 months.
But one area where lenders aren’t budging much is added fees. (See which fee you probably won’t have to worry about this year.)
As we predicted, lenders aren’t showing much leniency for customers with poor credit and continue to wield heavy cash advance, balance transfer and foreign exchange fees.
If you’re looking for a no balance transfer fee card, Card Hub recommends Slate from Chase, which offers 0% APR on balance transfer to 6-12 months, based on credit history.
There was bad news on the APR front, as regular APRs were higher than the same period last year, with increases between 3.5% and 9.5%. Student and business credit cards saw a 1% APR hike.
As poor credit customers are being elbowed out by fees, creditors really stepped it up to get new consumers with healthy credit into their good graces. Initial reward bonuses were 100% higher than the last quarter of 2012 and points and miles bonuses were up 10%, according to the report.
In 2010, the best cash back rates on the market capped at 1.25% and now can be found as high as 2%.
“The credit card market is obviously improving, mirroring the nation’s overall economic recovery,” said Odysseas Papadimitriou, CEO of Card Hub. “We can only expect the U.S. credit industry to become even healthier in 2012, with access to credit increasing and interest rates and rewards either standing pat or improving slightly.”
Get used to fees. See 10 other banking trends you’ll see in 2012 >