Credit Cards Now Offering Major Bonuses For New Customers
Credit card companies have joined restaurants and small businesses in offering benefits to boost their business.
During the pandemic, credit card companies pared back incentives such as points bonuses and rewards programs as unemployment soared, fearing customers would not be able to afford their bills and increase banks’ liabilities, Bloomberg reported.
In reality, the opposite took place. According to data from Statista, American credit card debt decreased by over 80 billion in the third quarter of 2020. Many have attributed this to constrained spending in light of high unemployment coupled with the rolling out of government aid in the form of direct payments.
As the economy picks back up and consumers with pent-up demand are re-entering the buying world, credit card companies are packing on new rewards and bonuses to lure in new customers.
The CapitalOne Venture Rewards Credit Card is offering 100,000 bonus miles after spending $20,000 on purchases in the first 12 months from account opening, a value of up to $1,700. You can still earn 50,000 miles if you spend $3,000 on purchases in the first three months alone.
American Express Co. is offering one of the largest sign on bonuses with a whopping 125,000 points, at a value of $2,500 for new applicants of its Platinum card. American Express has also recently teamed up with high-end gym Equinox to launch Platform X offering free workout videos to Platinum card holders for free, only through the Variis app. Statement credits will be provided for a monthly membership through Variis. The company also launched a new Centurion lounge at New York’s John F. Kennedy Airport, which will be available to Platinum card members.
Similarly, J.P. Morgan Chase is offering $120 in rewards toward a Peloton membership through the Sapphire Reserve and J.P. Morgan Reserve cards. If you purchase a Peloton bike, your Chase statement credits will automatically be applied to your membership if you enroll.
The Iberia Visa Signature Card is offering up to 100,000 bonus points, a value up to $1,500. You can earn 50,000 bonus points after spending $3,000 in the first three month and an additional 50,000 after spending $20,000 within the first year. They are also offering 10% off flights when you use the card and, if you spend $30,000 in a calendar year, you can can earn a $1,000 voucher for two seats on the same flight.
Discover is offering one of the larger cash back rewards programs with its Discover it Cash Back card. With this card, Discover will automatically match all the cash back you’ve earned at the end of your first year you open the card. There is NO limit to the amount they will match. This means that if you earn $1,000 in cash back rewards, Discover will give you another $1,000 for free.
The added incentives and cash back offers could be a way to let consumers know that new credit card opportunities are available.
A report by the Consumer Financial Protection Bureau Consumer Credit Panel revealed that new credit card applications were down 40% in the second week in March compared to the first. The CFPCC stated that this drop in new applications could be due to “a drop in credit supply affecting inquiries either directly or indirectly by heightening consumers’ expectation of being turned down for credit,” suggesting that people’s fears of being turned down for a credit card during the pandemic has largely contributed to a decrease in credit card applications.
If so, it could offer as to why credit card companies are now providing such generous benefit programs for new applicants. If you are looking to open a new card, don’t let the fear of rejection stand in your way — there are plenty of rewards to go around.
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