Due to the global economic recession credit cardcompanies now feel the need to raise their fees and interest rates, according to financial consultant Doug Nicholas, he argues that credit card issuers are adapting to changing times in order to stay in business.
Credit card companies now capitalize on their best deals or offers given that the economic recession has already deprived them of potential clientele. Moreover, the companies now need to recoup resources from the high risk investments which apparently turned out to be low in returns since the onset of the economic downturn.
Because credit card companies know that they benefit the most from high credit spenders who still manage to keep good credit scores despite changing economic conditions, the industry is now out to attract more of these potential cardholders for mutual growth and development.
Nicholas asserts that it is important at this point for credit card companies to highlight how their customers will benefit with their particular credit card offers and deals. Nicholas adds that currently, companies are yet to do substantial efforts to show transparency.
He said that such an effort includes dispelling misconceptions on abrupt interest rate increases or arbitrary additional fee introduction to credit card accounts.
He says further that now, we have seen several credit card companies prioritizing transparency in the way they market their deals. Nicholas believes that this is a way of responding to mounting pressures by different groups and organizations for credit card issuers to make information on fee changes immediately public whenever they arise.
Nicholas says that another thing which the credit card issuers are now doing is to entice more and more of their credit cardholders – and future customers – to use their cards more often. This is indeed good for companies who want to maximize profit. The incentive for the cardholders, on the other hand, is to spend at a maximum in order to benefit from a rewards system that give them discounts and other benefits.
Nicholas says that credit card companies understand very well that the more purchases their cardholders make with their credit cards, the more profit for the companies.
Finally Nicholas states that because the companies refuse to take back increased fees and interest rates, they entice their client with rewards points, benefits and discounts.