Credit Market Growing More Competitive For Card Companies

By Landon McGehee

Credit cards are not all created equally. Though some providers promise very low interest rates, more and more credit card companies are using rewards points to lure consumers into applying for their card. Cardholders can use these points toward purchases, airfare, lodging and many other products and services.

One of Citi's cards offers no interest introductory APR on balance transfers as well as on purchases made during the introductory periods, usually six months. But that introductory period is subject to change if the cardholder can't or doesn't pay on time.

Cards issued by Chase offer a 0% APR on purchases for the first twelve months. Members can get 1% cash back on purchases during this period. Not all Chase cards offer these rates, and consumers should research all of them before settling on a card.

A MasterCard offered by HSBC offers consumers who "Pre-Qualify" a selection from a number of products and services, and some of their cards even advertise 0% APR, though cash advances may not apply. Failure to make a payment or spending beyond the credit limit can void these incentives, though. Consumers should read the Terms and Conditions on any credit card contract before signing up.

No annual fees, 100% fraud coverage, 0% APR for the first year and cash rewards are among the incentives at Discover. Products and services from certain companies double the cash rewards in some cases. In some instances, cards are available with free online accounts.

American Express cards are known for low rates and the necessity of paying off the entire balance at the end of each month, which is really a better deal for most cardholders. But flexible payment plans are also becoming popular, and the consumer benefits by being allowed to pay a certain minimum payment rather than the entire balance.

Even phone companies are getting into the game. A low APR and long introductory period combined with a savings on cellular service sets AT&Ts cards apart from others. Free minutes, free directory assistance and insurance on your cell phone are among the other benefits, and customers can access their accounts for free over the internet.

There are traps to fall into, though with zero APR transfer cards. Quite often the stores that offer double cash rewards on credit purchases actually charge more for the product, and the consumer might be better off shopping somewhere else. Also, some credit card companies charge fees for shopping in non-traditional ways, such as online, or for banking services.