CARD SHARKS
Incentive feeding frenzy for top credit rung
THINGS ARE looking up for credit card holders — especially for those with sterling credit.
An improving economy and stiffer competition among card issuers for best-in-class cardholders is yielding lower interest rates and more robust signup bonuses, according to a new report from CardHub.com.
The average interest rate for those at the top of the food chain was 12.79% in the first three months of the year, down 1.69% from the fourth quarter of last year.
“The banks and credit card issuers are all competing for the cream of the crop,” CardHub senior analyst John Kiernan told the Daily News.
“The recent economic turmoil has made it more apparent that they need to bring these consumers into the fold.”
On the flip side, rates for cardholders with the weakest credit have gone up. Those classified as having “fair credit” saw their rates rise by 3% to 20.17%.
For those with strong credit, lower interest rates are just one in a list of improving perks.
The average length of a 0% intro rate for balance transfers increased in the first quarter of the year, reaching 10.29 months, 2.39% longer than in the fourth quarter of last year.
Other incentives are getting juicier too: The average cashback initial bonus was $76.81 in the quarter, up 15.4% from the previous three months.
“Delinquency and unemployment rates stabilized sooner than we anticipated,” Kiernan said.
“That allowed issuers to pass along their savings to their best customers.”
It all adds up to the potential to save hundreds of dollars — if you have good credit. That might require changing your habits while keeping in mind the payoff down the road.
“People should look at this as an incentive to maximize their credit scores,” Kiernan said. “The best way to do that is with on-time payments.
Foreign transaction fees fell 5.88% in the quarter, compared with last year.
But while terms are improving for some, certain types of consumer complaints about credit cards are surging.
The number of complaints categorized by the Consumer Financial Protection Bureau, as being related to credit determination and or credit lines, rose 92.3%, CardHub said.
pfurman@nydailynews.com