Credit Card Company Competition a Boon for Consumers

If you notice you’re getting a lot of credit card offers in the mail these days you’re not alone.  Experts say credit card companies are clamoring for new business, creating a very competitive marketplace for consumers in the market for a new card.

“Right now is a really good time to be in the market for a credit card because it’s so competitive,” said Matt Schulz, senior analyst with creditcards.com.

But Schulz said you need to choose wisely so your credit card works for you.

“It’s about having a card and having a plan that fits the best with your lifestyle and maximizes the bang that you get from each of these cards,” he said. “So if you can get miles or points or cash back for things you’ve been paying for years and years anyway and you are going to in the future, all the better.”

Credit card companies sent about 4.2 billion direct mail offers to Americans last year, according to Mintel, a global market research firm.  That’s up from 2012, when Americans received 3.2 billion offers.

We asked the experts at creditcards.com some top picks for individuals who like cash back and mileage rewards as well as those with no credit, like students, or bad credit.

Here are some cards worth researching:

Cash Back

• Citi Double Cash:  You get 1 percent back when you spend, and 1 percent back when you pay. There’s no annual fee.
• Chase Freedom: Earn 5 percent cash back on up to $1,500 worth of purchases at certain grocery stores, movie theaters and Starbucks stores.  Plus get 1 percent unlimited cash back on other purchases.
• American Express Blue Cash Everyday: 3 percent cash back at supermarkets for up to $6,000. 2 percent cash back at gas stations and select department stores. No annual fee.

Bad Credit/No Credit

Try a secured card.

“If you’re somebody who has never had a credit card before, a lot of times the best way to go and the safest way to go is a secured card,” said Schulz.

A secured card is like a prepaid card, but you get credit card protection and most report to credit agencies so you build your financial reputation.

“I would call it kind of like a credit card on training wheels. But it’s there to give you safe passage,” said Todd Mark, Vice President of Community Relations for Consumer Credit Counseling Service of Greater Dallas.

Some suggestions from creditcards.com:

• Capital One Secured MasterCard:  Put down a security deposit and you can get a line of credit of at least $200. Acts the same as a credit card.  You have to make payments every month and that will be sent to credit bureaus to help you rebuild or begin building your financial reputation. $29 annual fee and a 22.9 percent variable APR.
• Discover it Secured Card: No annual fee. Ability to graduate to unsecured card. First late fee forgiveness. Free FICO Score on monthly statements. Requires a one-time security deposit from the card member's bank account that Discover holds as collateral. Minimum deposit is $200. Credit line will equal deposit amount.
• USAA Secured American Express:  Only available for military members and their families. Very low APR of 9.9 percent with an annual fee of $35.

Miles Cards

The best card for miles often depends on where you live, where you fly and how often. In the DFW area, an American Airlines or Southwest Airlines credit card could be a good bet.

But there are several cards that are not specific to a particular airline that could be good choices for anyone.

• Barclaycard Arrival Plus World Elite MasterCard: 40,000 bonus miles when you spend $3,000 on purchases in the first 90 days. Two times the miles on all purchases. Redeem for any airline in the form of a statement credit. $89 annual fee that’s waived the first year.
• Chase Sapphire Preferred Card: 40,000 bonus points when you spend $4,000 on purchases in the first three months. No foreign transaction fees. Chip-enabled for enhanced security. Double points on travel and dining.
• Capital One VentureOne Rewards Credit Card: 20,000 bonus miles if you spend $1,000 in the first three months. No annual fee. Earn 1.25 miles for every purchase, every day.

Balance Transfers

• Chase Slate Card: No annual fee and a 0 percent APR for 15 months on purchases. A 0 percent APR for 15 months on balance transfers. Pay no balance transfer fee when you transfer a balance during the first 60 days the account is open.  After that the fee is 3 percent of the amount transferred.

If it’s a low interest rate you are looking for, it may be best to haggle with your current credit card company.  A lot of times the company will lower the rate to keep you as a customer.

Experts caution, whichever card you choose, you have to use it responsibly to reap the rewards.  That means making timely payments and trying to pay the balance in full, every month.

“Job one for any credit card user is to pay off your balance every month,” said Schulz.

“Focus on paying it off on time and in full and then everything that’s given to you is truly a gift.  If you’re paying interest you’re really subsidizing your own loyalty program,” said Mark.