Credit Card Cheer: Rewards Programs are Amping Up... - Products News

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Credit Card Applications » News » Products » Credit Card Cheer: Rewards Programs are Amping Up Perks for Holiday Shopping Season

Credit Card Cheer: Rewards Programs are Amping Up Perks for Holiday Shopping Season

This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.

Banks are hoping to route more revenue into their stockings this holiday shopping season by encouraging consumers to pull out their credit card to pay for purchases rather than their debit card.

In response to the Durbin Amendment, which went into effect on October 1, that capped the interchange fee amount banks are able to collect from merchants per debit card transaction, banks have been scrambling to finds ways to recoup some of the $8 billion they have estimated they will lose annually as a result of the new fee structure. In the effort to incentivize consumers to choose credit over debit as a payment option, most banks have all but eliminated any reward programs that were attached to debit cards use. Some banks, such as Wells Fargo and Bank of America, even announced plans to charge customers a monthly fee for using their debit card for anything other than ATM activity but those plans were abandoned in the face of widespread consumer outrage.

Now banks are employing different tactics –  instead of “penalizing” consumers for using their debit cards, they are trying to make the use of credit cards substantially more attractive. This is evident in the flurry of attractive promotional offers that come with opening up a new credit card account that have been sent out by mail to consumers.

Notably, banks are also really ramping up the rewards programs on the credit cards for the 2011 holiday shopping season.

“There is some kind of reward out there for everybody. It`s a matter of selecting one that`s of most value to you as an individual,” said Ken Paterson, the director of the Credit Advisory Service at Mercator Advisory Group according to Fox Business.

Cash back rewards are the most prevalent, with some issuers offering as much as 5% back on qualifying purchases such as on items bought through their particular online shopping portal. Big banks Citibank and Chase have both opted to extend generous cash back deals towards new cardholders in the form of $200 back if they make $500 worth of charged within a specified period of time.

For responsible users of credit, this holiday season is a time to really rake in the rewards.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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