One of the newest tactics used by credit card companies to entice more consumers to sign up for their products is offering credit cards that will help the person manage their personal finances. In recent months, several new credit card products have been introduced to the market that promise to help users pay down their debt, manage their daily spending, or budget for large purchases. These credit cards are being marketed to credit worthy borrowers in every income bracket as a simple way to take control of their finances.
Some financial experts believe that these new credit card products are meant to relieve the anxiety that many consumers are feeling about using their credit cards since the financial crisis of 2008. Unfortunately, many of these new credit card products carry interest rates that are significantly higher than the credit cards offered in past years. Many credit card issuers say that the higher interest rates are unavoidable because of the tight lending standards that the lenders are now operating under.
One of the most popular new credit cards offered is the Blueprint card from Chase. The goal of the Blueprint card is to make expenses more manageable by allowing cardholders to choose which purchases they would like to pay off every month and dividing large purchases into manageable payment blocks to be paid off over time. The account holders do not pay interest on the purchases that they pay off each month.
What many credit card holders do not know is that these same things can be accomplished with any credit card by the cardholder’s own actions. Anyone can go through the details of their credit card statement and pay off everyday expense charges. Although the person will not pay interest on the purchases that they pay off in full every month, they will be assessed interest charges on their other purchases and interest rate charged could be as much as 21.99%. The biggest benefit of this credit card is that it provides a visual aid for cardholder’s to see how they are managing their finances.
Other new credit card offerings, including the Payment Plus card from TD Bank’s, the Journey card from Capital One, and the Forward card by Citibank, offer customers better credit card terms for paying their bill on time. Some cards cut interest charges by a certain percentage when the cardholder pays more than a predetermined percentage of their overall account balance. Other credit cards offer cash back rewards or interest rate reductions for paying the bill before the due date on consecutive occasions.
Credit card issuers claim that these offerings are incentives meant to reward good behavior by the credit card holder, but the interest rates charged for these credit cards significantly reduce any benefits the cardholders receive from the card. The credit card companies state that the interest rates charged reflect the level of risk taken on the issuance of the credit cards. If the person can get a better rate with a different credit card, it may save them a great amount of money over the years that they hold the account. There are very few things that these credit cards can do that the people cannot do for themselves with smart financial management.