Credit Card Benefits That Better Serve Their Customers

• The credit card industry has become so competitive in the early 21st century that companies have had to be very creative in offering unique product and service benefits that extend beyond a fair interest rate for financing. Most card companies have a portfolio of card options with the intention of appealing to consumers with various debt and spending patterns.

Rewards and Rebates

• Credit card reward and rebate programs have become quite popular. These programs let consumers earn rewards and rebates for spending. This is an obvious incentive intended to drive more use. Reward programs may be dollar-based, but the Credit Card Guide notes that many programs reward consumers with points, redeemable for various gifts and perks, including "free hotel stays, merchandise, air travel, car rentals, gift certificates, and much more." Credit cards with rewards programs often have higher interest rates, but in its "Credit Card Rewards and Benefits" overview, the Credit Card Benefits website points out that reward cards are most beneficial to consumers with the discipline to repay balanced immediately during the grace period (time frame before interest is applied on new purchases).

Insurance

• In a March 2001 newsletter for the US Department of Justice, Sean Hoar wrote an article called "Identity Theft: The Crime of the New Millennium," in which he defined identity theft as "theft of identity information such as a name, date of birth, Social Security number (SSN) or a credit card number." Hoar's assertion has proven correct as of 2010, because identify theft is more common as a crime than drug trafficking. Among other benefits offered by credit card issuers, the Credit Card Benefits site notes that good credit cards are a "form of insurance." Credible card issuers help consumers in merchant disputes resulting from error, fraud or theft. This is not always the case with debit cards. The site even adds that some cards insure you for damaged or stolen merchandise for up to 90 days after purchase.

Low Interest Cards

• Obviously, every consumer would opt for a lower interest rate on any credit when possible. Credit card companies design specific low-rate card products for consumers that are more likely to buy now and pay later, according to the Credit Card Guide. Card issuers targeting consumers that carry a month-to-month balance usually offer low fixed annual percentage rates (APR) on balance transfers and purchases. Low-interest card programs often do not have the perks available to customers using rewards program cards.