Relaxed Standards for Credit Cards Mean New Offers for Consumers

by Gwen Moritz  on Monday, Aug. 5, 2013 12:00 am  

If your mailbox at home or at your business has been filling up with credit card offers, you aren’t alone.

Experts say the stepped-up marketing of credit cards, especially by the big players, signals the end of the most generous offers, which were being made to the most credit-worthy borrowers as credit card issuers continue to rebuild the business that was damaged during the recession.

For rank-and-file consumers, especially those who don’t carry balances, the terms can still be very favorable. But the growing popularity of cash-back cards can be a costly aggravation for merchants who may pay higher fees for the privilege of taking credit cards only to have a portion of the fees refunded back to buyers.

“There’s no doubt they are getting more aggressive when it comes to marketing, especially direct mail,” said Curtis Arnold, the Arkansan who founded and the new

But the offers, particularly the big signing bonuses that were being offered last year, are settling back down. They’re now being marketed to consumers whose credit scores may not be stratospheric, agreed Arnold and Anisha Sekar, vice president of credit and debit products for

After the financial crisis, banks “really tightened” their underwriting standards for credit cards, Sekar said.

(Tim Chen, founder of NerdWallet, has reported that credit card issuers were writing off more than 10 percent of outstanding balances during 2010.) For those with stellar credit scores, issuers were making stellar offers.

“Pretty amazing bonuses last year — 100,000 point bonuses,” Sekar said. “And we used to see these amazing cash deals that are just not around anymore.”

“There are a few more strings with the current bonus reward offers,” Arnold said. “The intent is to get you to engage with that card.”

For instance, cash-back reward cards typically offer 1 percent rebates on all purchases, but some — Chase, Bank of America and others — are encouraging the use of credit cards on purchases that consumers used to think of as routine cash expenses, like gasoline and groceries.

Those kinds of purchases may now generate higher rebates — 3 percent or 5 percent — for a three-month period or for a limited amount of purchases.

Issuers also keep trying to steal debt from each other, the experts said. And balance transfers with generous interest-free periods are still available.



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