There are some common marketing strategies that credit card companies use to attract customers, and there is a good reason why: competition is touch while not all people are convinced that having a credit card is to their advantage.
The Credit card – a necessary evil
Many people consider that credit cards are a real rip-off, having in mind the high interest rates and annual maintenance fees that most credit card issuers charge. On the other hand, few of us can imagine today’s life without them. Think how difficult it would be to book a hotel or rent a car, if you hadn’t got a plastic portfolio in the form of a credit card. But a credit card gives you much more than the convenience of booking a hotel room from thousands of miles away or purchasing stuff online. For instance, most of the credit cards nowadays include payments insurance, which allows you to easily claim a refund if you are not satisfied with the quality of goods or services that you have received. Also, there is insurance on a substantial part of the losses you have suffered as a result of a lost or stolen credit card. So, if you weigh the pros and cons of having a plastic portfolio, you will arrive at the logical conclusion that in our age of global connectivity and electronic payments, you can do much better with than without it.
It’s all about flexible marketing
Credit card companies all over the world have been struggling for clientele for quite some time. However, the competition is especially tough in North America, where almost ninety percent of the Canadian or American citizens of legal age have one or more credit cards. So as to survive the harsh market conditions, the credit card companies have employed many strategies such as: buy now pay later – a strategy exploiting the credit card holders’ desire to have items that they cannot afford paying for in cash; reward points – luring credit card holders to use more of their credit card’s limit against a certain amount of reward points that usually materialize in free air miles or discounts at particular stores; low interest rate introductory offers – offering credit card holders insignificant interest rate on their purchases with a credit card over the first year or so of their contract; refinancing offers – credit card companies usually offer their clients one low interest credit card, which they can use to pay off the outstanding balance of their other credit cards, etc.
The bigger picture
Buy now, pay later, but never buy something that you cannot afford paying in cash; reward points are good, but they are a small compensation for the interest rate, membership service fees, and late payment fees that you have to pay as a credit card holder; the interest rate is really low in the introductory offer, but it becomes quite high when the promotional term is over; refinancing offers may be tempting, but most finance experts will tell you that you should never use debt to pay off debt.
Even if the bigger picture isn’t as bright as the ads tell you, it is still better to have a credit card than not to have one!
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