By now, news of credit card issuers cutting credit limits, hiking interest rates and closing inactive accounts is commonplace and has reached the mainstream.
An oft overlooked consequence of these actions by banks is that a consumer with a perfect payment history and who has managed their credit responsibly could still find their credit score plunge.
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Following close on the heels of Schwab’s introduction of its 2% cash back card, Fidelity Investments announced the Fidelity Retirement Rewards American Express Card. The new card carries no annual fee, caps or limits on its rewards, and earns a 2% rebate on purchases when rewards are redeemed as a current year contribution into a Fidelity IRA.
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Cap One recently launched a new No Hassle Rewards Card targeting frequent travelers. The credit card earns two miles for each dollar of monthly spending above $1,000 and one mile per dollar on all other purchases.
Cap One miles redemption is quite flexible, as you have the complete freedom to book your travel by any means you prefer with no blackout dates or seat restrictions. Customers can charge any travel related expense–including airline, hotel, cruise line and rental car transactions–to their card, then call Cap One to reimburse the charge with their miles. Each mile is worth 1 cent and the refund is credited on the next statement. In addition, there is no limit to the number of miles you can earn and your miles do not expire.
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Wow. It looks like a new gold standard for cash back credit cards is being set. The Schwab Bank Invest First™ Visa Signature Credit Card offers a full 2% cash back on all purchases with no tiers, no limits to the cash back you can earn, and no annual fee. As if that wasn’t enough, the card also does not charge any foreign exchange transaction fees.
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In a reprise of a deal they also offered a year ago, Barnes & Noble is offering 40% off a single book when you make the purchase using your MasterCard. The offer is available both online and in stores beginning November 26, 2008 and lasting through December 1, 2008 at 2:59am EST.
There are a number of items that are not eligible for the discount, including gift cards, gift certificates and textbooks. The coupons, along with the full list of exclusions and details can be found here:
Facing the greatest financial crisis of the generation, lenders are taking a number of actions to mitigate their risk. In addition to slashing credit limits, credit card issuers are reacting by aggressively closing inactive accounts, hiking rates and fees, and even completely eliminating balance transfers and convenience checks.
As the end of the year nears, it’s especially important to carefully read your credit card statement, as issuers are cramming all sorts of new changes to your agreement–with many of those changes resulting in increased rates and fees. Here are a few of the recent changes I’ve noticed in my agreements:
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In what could be a portent of things to come, American Express has sent notice to all of its OPEN small business credit card holders that it will no longer process balance transfers or convenience checks. In card holders’ November statements is the notice:
Effective immediately, Balance Transfers and Convenience Checks against OPEN Credit Card accounts will no longer be accepted or available. This includes requests made by phone, online or through the use of Balance Transfer, Convenience Checks and Cash checks.
I called Amex and they confirmed that all small business credit cards are affected, including new accounts.
This is clearly bad news for small business owners. In the current economic climate, businesses can no longer rely on their open lines of credit to be there when needed. Businesses would be well advised to hold adequate cash reserves, have lines of credit from multiple creditors and if necessary, to draw on these lines in advance of when they are required.
Redstone Federal Credit Union has an intriguing cash back credit card offer. Its VISA Gold, Visa Platinum, and Gold MasterCard earn a 1% cash back reward on the first $5,000 in annual purchases and 2% cash back on all purchases above $5,000. There is no mention of a cap on rewards. This means that if you charge more than $10,000 in a year, you’ll come out ahead of a 1.5% cash back card.
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Just in time for the holiday shopping season, Amex has teamed with Walmart to offer a very generous deal:
Simply spend $40 or more 2 times from November 18 through December 18, 2008 at a Walmart store or at Walmart.com using your American Express card and you’ll receive a $20 statement credit. Valid purchases must not include gift cards, gift certificates or prior purchases. In order to receive the bonus, you must first enroll at this link. (Via FW)
From now until January 31, 2009, you can earn $10 cash back for every $100 you spend on New York area transit when you pay with any Bank of America Visa credit or check card. You can earn up to $100 during this promotion, but you must sign up first to begin saving.
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