Credit Cards Go On The Offensive – But Only For The Rich

While most conventional commentators have noticed the seeming decline of the credit card industry, Financial Facts argues that the market is still strong, but fighting for its life more than ever before.

Over the last quarter, UK card-spending has improved. According to the the Payments Council, there was a 6.9% increase in card-usage despite only a 4.3% rise in the value of these purchases. Limited specifically to credit cards, the value of purchases dropped by 0.7% but the amount of sales increased by 2.5% – suggesting that while families are cutting costs, there is still a heavy reliance on card-based spending.

In America, the battle for credit-card supremacy has been waging for a long time, with competition at an all-time high. According to Mintel Comperemedia, the amount of promotional mail sent out by these companies increased to 180 million letters in October, an increase of 34% from the previous month. Andrew Davidson, of Mintel, comments: “it’s all about being the No. 1 card in the wallet. The battle will intensify because you will only use one or two cards with the fee. You are not going to have four or five cards.”

Along with an increased marketing push, especially present in companies like Chase and American Express, other companies have focused more heavily on providing additional enticements in the form of bonus offers. MBNA has brought out a slew of credit card deals, offering airmiles, charity donations and sports teams affiliation in an attempt to woo new customers.

Despite this, many people are still struggling to find credit cards, as banks are becoming increasingly selective about the recipients of these offers. With the recent recession, few are willing to take risks and will automatically target the wealthy, knowing that they are guaranteed to pay back any loaned money. However, as there are only so many consumers that fit within this bracket, it would seem a guarantee that the card companies will be forced to appeal to the less economically gifted in a matter of months. Which may not be good news for the Christmas season, but with savvy shopping, it should still be a happy holiday season.

About Writer:

I’d like to remain as a guest blogger from financialfacts.org. where we don’t promote get rich quick schemes, but encourage people to join in and help each other with all methods of saving money to stop the rich getting richer!

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