Sunday, March 28, 2010, AM | 10 Comments
Now that the new credit card law, passed by Congress last year and dubbed Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 and went into effect February 22, 2009, the consumers have started to see some limits on fees and interest rates.
But these companies are not going to sit around and wait for something to happen to their advantage and fall in their lap by itself.
They have sprung into action and have started to put restrictions on some benefits that they traditionally have been offering. In order to make up for their potential loss, they have cut down on cost and rewards which reduced their treasuries by over $15 billion in 2009. They could always recover that and then some with fees and interest.
So what does the consumer have to do to still get some benefits from the rewards before they are reduced further? The below are three ways you can change your tactics to take better advantage:
Take the money
Cash back is usually better than other rewards such as airline miles or products, says Curtis Arnold, founder of CardRatings.com. If you go for airline miles, beware that a new redemption fee might be imposed on the reward. In other cases, to get a decent reward, you might have to accumulate more points than during the bygone years.
Deals will not last forever
Any kind of perks that you are used to, beware that they might be reduced and worse be eliminated altogether. Some companies have started doing just that. For example, American Express slashed the cash-back rebate on its Blue Cash card from 1.5 to 1.25 percent last year. Chase and Discover advertise a handful of “seasonal promotions” and offers 5 percent back on those categories. Every three months or so, the categories change.
Choose your credit card wisely
Do research and find a card that works for you. There are websites such as BillShrink.com that can help match companies’ reward programs to your spending habits. If you have good credit and are a big spender with the love of perks in your heart, you will not see a big cut in rewards benefits. Chase’s new Sapphire card, for example, attracts you with concierge service and reimbursements for lost luggage. But mind you. These extras aren’t free. The card costs an $85 annual fee after the first year.
In a Nutshell
Keep an eye out for changes, and don’t wait to cash in on rewards. Do research, read the fine prints and then choose your credit card carefully.
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