As the economy headed into recession, you may have noticed a sharp decrease in the number of direct mailing solicitations sent by credit card companies. During the second quarter of 2009, these offers decreased by eight percent. However, the number of offers for premium credit cards with annual fees experienced a 28 percent increase during this time. This leads to the question of whether credit cards with annual fees are worth the expense.
The terms of these cards are often not more favorable to the consumer than any other card. Banks make guaranteed money from the annual fees paid by cardholders. The cardholder may be provided with additional benefits that other cards do not carry, but these are often not general enough to provide the average consumer with any value.
In the midst of the economic decline, credit card companies released new premium cards such as the Visa Black and Chase Sapphire cards. Credit card companies began approaching consumers cautiously, starting with the segment of the population that was the safest bet. That means those who are financially comfortable enough to pay the annual card fee.
Experts point to the increased rate of savings and decreased amount of debt placed on high-interest credit cards as possibly forever changing the credit card landscape. Offering a premium card to consumers guarantees revenues to issuers. The hope is that cardholders will charge up these cards, resulting in more income to issuers in the form of interest rates.
As a result of the economic downturn, consumers are more cautious in general when it comes to spending. They will closely scrutinize the perks offered by these premium cards before completing an application. Some of these cards do offer great benefits but the value is in the eye of the consumer. There are other options such as no-fee credit and debit cards with rewards programs.
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