Credit Cards

Tips, news, reviews, caveats, trends, updates and analysis related to consumer and business credit cards, and prepaid debit cards. From the interest rate specialists @ FedPrimeRate.com

Wednesday, November 23, 2005

Credit Card Companies Continue to Sour The Balance Transfer Milk In The UK

Credit card companies in the UK, fed up with losses associated with the generous 0% balance transfer deals they've been offering, have started to implement changes to their interest free offers in an effort to boost sagging profits and to discourage balance transfer surfing and stoozing.

Capital One, MBNA and others started charging a balance transfer fee this year. This move has probably helped to discourage balance transfer surfing by customers wishing to transfer relatively small balances, but these fees haven't stopped surfers with large credit card balances, as long term savings can still be achieved when transferring large balances, even when the destination bank or credit card company charges a balance transfer fee.

More recently, the One Card from Halifax has cut the interest free period associated with it's 0% balance transfer offer from 12 months to 3. Halifax also raised the "go to" rate--the annual percentage rate that's charged once the interest free period ends--with this card from 12.9% to 15.9%.

Nationwide Building Society no longer has an interest free balance transfer offer; the best you can do with Nationwide these days is a 4.9% balance transfer rate for 12 months.

Some credit card companies have also started to bring back annual fees to try and make up for lackluster profits.

On the U.S. side of the pond, changes related to balance transfers are happening, but not as drastically as in the UK. Many American credit card companies are now giving the credit consumer a choice: either a low APR (somewhere in the range of 2.99 to 8 percent) period until the transferred balance is paid off, or an interest free period on transferred balances for anywhere between 3 and 12 months. Good stuff. And Discover is still very aggressive with their 0% balance transfer offers; I got another offer from Discover in the mail yesterday with an offer to transfer my higher-rate balances to their Platinum card with no interest charges on the transferred balances until March of 2007! I'm not in the market for a credit card balance transfer right now, but I may take Discover up on their offer the next time I receive a hot solicitation from them.

Stay tuned for balance transfer news...


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Tuesday, November 15, 2005

MoneyGram Teams Up with KeyBank To Offer A $9.95 Prepaid Debit Card

You probably know MoneyGram as the company that provides money order and money transfer services. Now MoneyGram has teamed up KeyBank to take on the prepaid market, offering a new prepaid debit MasterCard. Details can be found below in the snippet from a press release issued today:

"MoneyGram will debut its new prepaid card program to the convenience store industry during the annual National Association of Convenience Stores (NACS) Show, Nov. 15-18 in Las Vegas. The company expects a full launch of the MoneyGram Prepaid MasterCard® card program in the U.S. in 2006, but select agents will be invited to sign up for early roll-out.
With the prepaid debit card program, MoneyGram is expanding into a new line of payment services. Currently the company is a leading provider of money orders in the U.S. and major provider of global money transfers services, but this is the first time it has offered a card product.

The MoneyGram prepaid card, issued by KeyBank, will sell for $9.95 and enable customers to 'load' cash onto the card at more than 20,000 MoneyGram locations in the U.S. The stored funds can then be withdrawn at more than 900,000 ATMs or used to make purchases at more than 24 million locations around the world.

'We're excited about the prepaid card,' said Phil Milne, president and chief executive officer of MoneyGram International, Inc. 'It will meet the needs of the unbanked or underbanked customer who does not qualify for traditional credit cards. Whether traveling or shopping, it's a more convenient and safe way to carry cash, and unlike cash or checks, the MoneyGram prepaid MasterCard card can be replaced if lost or stolen.'

'MoneyGram is thrilled to bring this opportunity to the convenience store industry. We feel there is a strong overlap in the demographics of the money order, money transfer and real-time bill payment customer with the prepaid card customer,' said David Karl, vice president of business development and sales at MoneyGram. 'People using MoneyGram services at convenience stores appreciate fast and efficient service. MoneyGram's prepaid card fits right in with this model, with no need to worry about exact change or having enough cash on hand for convenience purchases.'

MoneyGram's prepaid card currently is sold in a limited number of locations in New York and Miami. Prior to the full rollout of the card program next year, MoneyGram plans to begin offering the cards in key markets around the country.

According to Ted Dargan, MasterCard International's vice president, stored value team lead for the Americas, MoneyGram's industry expertise ideally positions the company as a marketer of prepaid MasterCard cards.

'The MoneyGram prepaid MasterCard is a powerful and versatile payment solution for consumers who desire the advantages that payment cards deliver over cash and checks,' said Dargan. 'MoneyGram's industry leadership and deep understanding of consumers with non-traditional banking relationships are important to providing this customer segment with a prepaid card that delivers tremendous value.'

MoneyGram International, Inc., (NYSE:MGI) is a leading global payment services company and S&P MidCap 400 company. The company's major products and services include global money transfers, money orders and payment processing solutions for financial institutions and retail customers. MoneyGram has 84,000
money transfer agent locations worldwide in approximately 170 countries."


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Thursday, November 10, 2005

If The People @ Mint Have Their Way, Prepaid Credit Cards Will Soon Be As Popular in Canada As They Are In The United States

Prepaid credit and debit cards are selling very well in the United States; Mint hopes to make them just as popular in Canada. Here's a snippet from a press release issued today:

"Mint Inc., a subsidiary of Mint Technology Corp. (TSX-V: MIT), is pleased to provide the following update on the Company's progress on the introduction of prepaid credit cards in the marketplace. A widely accepted and popular method of payment in the United States, Mint is the first company to deploy and support prepaid, reloadable credit card programs in Canada.

Mint announced today that two of the Company's prepaid, co-branded credit cards have launched to date and are being sold through retail outlets in and around Toronto. Initial sales of the cards show a positive trend in consumer acceptance. Furthermore, another five prepaid, co-branded credit cards are due to be launched over the next quarter, and will be distributed through nationwide retail networks. The number of cards pre-sold equals 275,000 thus far, providing upfront revenue to the Company. In addition to the co-branded programs being introduced, Mint has been approached by several corporations to supply another Canadian first -- a prepaid payroll credit card. Participating companies will supply their employees with a prepaid credit card to automatically transfer paycheques and corporate expenses to their cards. The convenience of a prepaid payroll credit card will lead to direct administrative cost savings.

Mint's prepaid credit card programs generate revenue from four different sources; consumer card purchases, cardholder transactions, monthly user fees, and interest on the prepaid float.

A large segment of Canadians who have been excluded from obtaining traditional credit cards now have access to the convenience, services and safety that a credit card provides. Virtually anyone can purchase a prepaid credit card because prepaid credit cards do not require a credit check and age requirements are lower. A prepaid credit card can be useful in countless situations including parents funding university expenses or wanting to teach financial responsibility to their children; giving consumers a safe way to make online purchases; or supplying a platform for business owners to provide and track employee expenses. Prepaid credit cards can be used at the millions of worldwide locations where traditional credit cards are accepted today including retailers, websites, mail order, mobile purchases and select ATM cash withdrawals.

While the market is virtually untapped in Canada, prepaid credit cards are the fastest growing segment of the payment industry in the United States. The Pelorus Group projects that the number of prepaid debit cards [US equivalent to Canadian prepaid credit cards] will grow from 15 million in 2003 to just over 50 million in 2008. A study by Mercator Advisory Group indicated that in 2004, US$159 billion was loaded onto prepaid cards, representing a 24% increase over 2003 in the United States."


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News Ways To Save By Using Any American Express Business Card

OPEN from American Express announces new ways to save money when you use any American Express business charge card or business credit card. Details from a press release issued today can be found below:

"OPEN from American ExpressSM today announced it has launched several new partners in the OPEN SavingsSM program, providing exclusive savings in the U.S. just by using the American Express® Business Card. Courtyard by Marriott®, FedEx Kinko's Office and Print Centers, Fairfield Inn by Marriott®, Hyatt Hotels & Resorts®, Ruby Tuesday Restaurants, SpringHill Suites by Marriott® and Wingate Inn® hotels join existing industry leading partners, including FedEx, Hertz and AT&T in this unique program.

Unlike most small business credit card savings programs, OPEN Savings eliminates the need for offer codes, coupons or program enrollment and provides automatic savings to business owners from well-known brands. In addition, the savings are combinable with other marketplace offers or volume discount pricing that an individual business may already receive from program
partners.

In just eighteen months, OPEN Savings has delivered more than $75 million in savings to American Express Business Cardmembers.

'For small businesses pressed for time and weary of short-term offers that require coupons or offer codes, OPEN Savings delivers simple, automatic and combinable discounts just by using the Card,' said Ed Vittoria, vice president, OPEN from American Express. 'OPEN is proud to extend our breadth of OPEN Savings partners and deliver millions of dollars of savings to our
small business Cardmembers every month.'

OPEN Savings Partners

OPEN Savings is a benefit embedded within all American Express Business Cards. To earn the savings, American Express Business Cardmembers must simply use their credit or charge card for purchases with any OPEN Savings partner. The savings will automatically appear on the Cardmember's monthly statement and can be tracked at http://www.opensavings.com.

Partners and discounts include:

  • Administaff: 25% off enrollment fee for HR Services
  • AT&T: 5% off local & long distance services
  • Business Filings: 20% off incorporation and registered agent services
  • Ceridian: 20% off payroll preparation
  • Constant Contact: 15% off e-mail marketing
  • Courtyard by Marriott: 5% off hotel charges (new)
  • ExpensAble: 25% off expense reporting software
  • 1-800-FLOWERS.COM(R): 5% off gifts
  • Fairfield Inn by Marriott: 5% off hotel charges (new)
  • FedEx: 5% off Express and Ground shipping
  • FedEx Kinko's: 5% off business services (new)
  • Hertz: 5% off car rentals
  • Hyatt Hotels & Resorts: 3% off hotel charges (new)
  • Logoworks: 15% off logo and graphic design
  • Ruby Tuesday: 5% off dining (new)
  • SpringHill Suites by Marriott: 5% off hotel charges (new)
  • Wingate Inn: 5% off hotel charges (new)
  • UnitedHealth Allies: 40% off health discount program fees
The savings appear as credits on monthly statements or can be tracked online at http://www.opensavings.com. OPEN Savings discounts are calculated on the full transaction amount, including any taxes and surcharges. Terms and conditions apply.

About OPEN from American Express

OPEN is the American Express team dedicated exclusively to the success of small business owners and their companies. The OPEN Team supports business owners with unparalleled service. With tailored products and services, the team delivers purchasing power, flexibility, control and rewards to help customers run their business. Customers can leverage an enhanced set of products, tools, services and savings, including charge and credit cards, convenient access to working capital, robust online account management capabilities and savings on business services from an expanded lineup of partners. To obtain more information about OPENSM, visit http://www.OPEN.com, or call 1-800-NOW-OPEN to apply for a card or loan. Terms and conditions apply.

American Express Company (http://www.americanexpress.com) is a diversified worldwide travel, financial and network services company founded in 1850. It is a world leader in charge and credit cards, Travelers Cheques, travel, business services and international banking.

1. OPEN SavingsSM: Payment must be made with an American Express® Business Card. Savings will be credited to your American Express Business Card billing statement. All savings referenced are in addition to any offers made by participating companies. Participation and offers are subject to change without notice. Terms and conditions apply. For more information and the full OPEN Savings partner terms and conditions, please visit opensavings.com.

2. Courtyard by Marriott®, Fairfield Inn by Marriott® and SpringHill Suites by Marriott®: Valid at over 950 participating locations within the U.S. For a complete list, visit marriott.com/opensavings. Savings do not apply to charges relating to third party sales
transactions (such as pre-paid travel agent, wholesaler, online travel service or similar transactions) not paid directly at, or through, the hotel. The maximum annual savings available is $1,500 per Account.

3. FedEx Kinko's Office and Print Centers: Valid at all channels through which FedEx Kinko's accepts the Business Card in the U.S., except http://www.officeproducts.fedexkinkos.com. Payment must be made with Business Card at time of purchase. Maximum annual discount is $1000 per Account.

4. Hyatt Hotels & Resorts®: Valid at all locations within the U.S. and Puerto Rico. Savings do not apply to charges relating to third party sales transactions (such as pre-paid travel agent, wholesaler, online travel service, Internet access or similar transactions) not paid
directly at, or through, the hotel.

5. Ruby Tuesday®: Valid only at U.S. domestic locations, excluding Hawaii.

6. Wingate Inn®: Valid at all locations within the U.S. Savings do not apply to charges relating to third party sales transactions (such as pre-paid travel agent, wholesaler, online travel service or similar transactions) not paid directly at, or through, the hotel."

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