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Bigger rewards, better perks: Credit card offers are 'booming' — here's how to choose wisely

"The card market is booming right now."

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If you've noticed an uptick in credit card ads and offers recently, you're not imagining things: Credit card companies are working hard to woo new customers right now. Americans are in a shopping mood and issuers want in on that action, says Ana Staples, reporter at CreditCards.com.

"The card market is booming right now because of all the pent-up demand," Staples says. Simply put, "credit card issuers are getting more confident about borrowers."

One reason for that confidence: Americans have been using plastic more responsibly in the last two years. Overall credit card debt fell almost 17% between the end of 2019 and the beginning of 2021, according to the Federal Reserve Bank of New York, and fewer Americans are carrying balances from month to month than ever before, according to the American Bankers Association.

A lot of credit card companies stopped giving generous sign-up offers, like welcome bonuses or lengthy periods of 0% interest, at the beginning of the pandemic: They were anxious that new customers might not have the financial bone fides to take on new debt, experts say.

However, consumer spending has bounced back in a big way since those early days — it rose 1.7% between September and October, more than double the increase from the month before — and overall credit card debt continues to be lower than it was pre-pandemic. Those two factors have made lenders excited to enroll new customers and that eagerness could be a boon for consumers if they take advantage of new sign-up offers, Staples says.

Look for 'new credit card products that are made just for travel'

Rewards cards overall are getting more valuable: Customers are earning an average 1.11% in cash back on every dollar spent, up from 1.08% a year ago, according to WalletHub. The average base rate for miles or points is 1.2 per dollar spent, up from 1.18.

People who've been putting off their vacations may be particularly interested in the many new travel reward offers flooding the credit card market right now, Staples says. As more and more people have begun flying again, the credit card industry has responded in kind.

"We are now seeing new credit card products that are made just for travel, with travel rewards and all kinds of perks," like airport lounge access, free checked bags, and even credits toward TSA PreCheck fees, Staples says.

For example, Capital One launched the Venture X Rewards card this fall. Billed as a premium travel credit card, it's intended to compete with heavy hitters like American Express Platinum or Chase Sapphire Reserve, but with only a $395 fee, Staples says. "So, compared to Chase at $550, and American Express Platinum [at $695], that is way cheaper and you get all these amazing perks," including 100,000 miles as a sign-up bonus.

Taking another cue from high-end competitors like American Express, Capital One opened its first airport lounge in early November at Dallas Fort Worth International Airport, and plans to open more at Denver International and Washington Dulles International in early 2022. All its lounges will offer amenities like dining, shower suites, and even Peloton bikes, according to The Points Guy, and you'll be able to get unlimited visits with the Venture X card.

Balance transfer cards are offering generous terms

Card offers aren't limited to rewards. Issuers have increased the number of balance transfer offers, which allow borrowers to transfer a set amount from a higher-interest credit card to a lower one and pay it off over several months without incurring interest.

Offers for balance transfer cards all but disappeared at the beginning of the pandemic. Now new ones pop up every month, and many of the terms are more generous. "There's just so much competition among issuers, that it's really beneficial for consumers," Staples says.

Some issuers such as Wells Fargo and Citibank are offering 21 months of 0% interest on new balance transfer cards. Applicants generally need a very good credit score to qualify, and cards typically charge fees worth up to 5% of the balance transferred.

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'In every niche in the credit card market, something is going on'

As exciting as all this movement in the credit card industry can be for consumers, it's important that anyone looking to get a new card not go overboard in the excitement. Going into unnecessary debt to rack up air miles or points is never a good idea, experts say.

However, smart spending strategies, like paying your card's balance every month and using your credit card like a debit card, can make credit card rewards a nice source of passive income, whether it's accruing points for a future trip or earning extra pocket change with cash rewards.

Balance transfer cards can also be a great way to knock down the amount you pay in interest and make more headway on repaying debt.

Consumers interested in cashing in should be aware that offers are changing swiftly, and as we end 2021 and head into 2022, those offers will likely continue to be as good if not get better, Staples says. "I would suggest to consumers to watch the credit card market," she says. "Whether they have fair or bad credit or whatever their needs are. In every niche in the credit card market, something is going on."

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