Lenders continue to beef up introductory credit card offers

In the last several months, many consumers, including those who have tried to reduce debt due to past financial problems, may have found themselves receiving a larger number of credit card offers. The nation’s top credit card issuers are now aggressively broadening their lending standards in an effort to expand their customer base, according to a report from TIME Moneyland. And one of the primary ways they’re doing so is not by targeting those with troubled credit histories, but rather sending extremely valuable introductory offers to consumers with the best credit scores. And in the last few months, as lender competition for these superprime borrowers has heated up considerably, the value of those initial offers has grown significantly.
Just last summer, top-notch borrowers could expect to get hundreds of dollars worth of bonus points, miles or cash back, just for signing up, and spending a certain amount in the first few months the account is open, the report said. But now, the most aggressive of these offers are worth more than $1,000 to borrowers who meet certain spending thresholds.
For example, the ThankYou Premier card from Citi will grant new cardholders a maximum of 80,000 points for signing up and then spending $3,000 on the card within the first three months the account is open, the report said. Those points are worth $1,060, meaning consumers are essentially earning more than 33 percent cash back on the initial offer.
However, that deal is beaten out by the offer for new customers who get an American Express Platinum card, the report said. The maximum value of that introductory offer is 100,000 points, which can be worth as much as $1,200. This card, too, has the $3,000 spending threshold in the first three months the account is open, but the total value of the cash back offer is 40 percent of that spending.
However, consumers should keep in mind that these offers also come with sizable annual fees that can take a lot of spending on a card to cover with rewards points. They also typically carry higher interest rates than no frills cards, meaning that credit card debt can pile up far more quickly on such an account if the balance isn’t being paid off in full at the end of every month.

Courtesy Debtmerica

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