It is a constant game that involves the credit card issuers, the regulators of the credit card industry and sometimes the credit card customers. Credit card issuers are always trying to dodge tough rules in the card industry and utilize various strategies to exploit and manipulate the customers. So it is important for credit card customers need to be aware of these strategies used by credit card issuers.
Card issuers are commonly issuing co-branded cards. Co-branded cards are good offers, which are a win-win situation for some credit card customers, but for others they can become an added expense. For example, for a customer who travels frequently, a co-branded card with an airline company involved could be particularly handy with extra miles, bonus miles and special privileges across airport lounges. However, for someone who doesn't travel often, co-branding involving hotel chains and restaurants, with special benefits on the cards might not really account for much. Going for a balance transfer
for such a card should be purely based on calculation and not on the reputation of the card.
Waiving of card fees
Some balance transfer cards
come without any card fees. These can make for a very good deal, especially for customers who already have a high outstanding balance and don't want to take on more debt. Whether it is the balance transfer fee, the annual fee, activation and application fee, card issuers have a lot of tricks up their sleeves. Therefore when there is no fee, the cardholder can breathe a sigh of relief.
The holiday season is approaching and many of credit card companies want to make the best of this season, given that there are a lot of credit card customers who are itching to spend some money by shopping or going on vacation. Therefore, credit card companies are using balance transfer deals to attract cardholders to their companies given the intense competition. They do so by giving incentives like starting bonus points which are great for holiday shopping. For example, there are credit cards, which offer bonus points that can be redeemed when customers reach specific spending targets. For example, if there is cash back of $100 if you spend $500 in 3 months, many of cardholders will be tempted to go for a balance transfer.
No Interest on balance transfers as well as purchases
This offer is usually available for those with good credit, but is certainly a strategy amongst credit card issuers to entice other card customers into using their cards. Citibank for example, is offering a number of credit cards
which have a 0% APR for 12 months on balance transfers, and 0% APR on purchases for 7 months which is a decent deal. This avoids confusion in the minds of the cardholders, because they can blindly consider that there is no interest on their credit card, irrespective of the outstanding balance on it, due to balance transfer or due to purchases.