Credit card companies are offering greater cash bonuses and other rewards than at any other time in recent history, according to a new Mintel Comperemedia study. The study reported that cash rewards have risen by 23% from the 1% average they were in 2007.
Andrew Davidson, senior vice president of Mintel Comperemedia, said that more types of credit cards are offering cash incentives than ever before. “An additional cash incentive offered while applying for credit cards and usually triggered upon first purchase or once a cardholder spends a specific amount on the card, has been popular in the competitive cash back card segment. However, we are now seeing cash used as an additional incentive for some mileage cards, as well as cards without rewards,” Davidson said.
In the first quarter of this year, close to 60% of the bonus miles, points and cash incentives being offered by credit card companies were intended to entice people to merely apply for their credit cards. Davidson said, "Some of the incentives are so attractive, they might as well apply for the card."
Davidson added that the Chase Freedom card with its $300 cash back for those who spend $500 in three months is one of the greatest incentives he has seen. CreditDonkey.com has likewise identified credit cards offering great incentives. Its editors’ choice rewards card is the Bank of America Accelerated Cash rewards Cash American Express card, which gives $50 credits following qualifying transactions, 1.25% cash back on net retail purchases, and no annual fee. Other reward offering cards highlighted by CreditDonkey.com are the Chase Freedom Visa card, the Chase Sapphire card, and the American Blue Cash Everyday card.
Some observers of the credit card industry are skeptical regarding how positively these rewards will be on the credit card companies’ bottom lines. They are concerned that many credit card applicants will simply apply for the cards and use them only until they get the most out of the rewards before cancelling the cards, leading to the companies losing money.
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| Intro APR (P) | Intro APR (BT) | APR as low as | 0% for 12 months | 0% for 12 months | 10.24% (Variable) | | - Up to $250 cash back bonus - $100 cash back bonus after your first purchase, plus an additional $150 after you spend $5,000 within 3 months!
- 5% cash back on the first $25,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services
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- Cash back rewards do not expire
- 0% Introductory APR for 12 months
- No Annual Fee
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| Intro APR (P) | Intro APR (BT) | APR as low as | 0% for 12 months | - | 17.24% - 22.24% (Variable) | | - Earn $150 cash back after spending $1,000 in eligible purchases in the first 3 months of Cardmembership
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| Intro APR (P) | Intro APR (BT) | APR as low as | 0% for 15 months | 0% for 15 months | 12.99% - 22.99% (Variable) | | - Earn $100 Bonus Cash Back after you make $500 in purchases in your first 3 months
- 0% Intro APR for 15 months on purchases and balance transfers
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