The Best Credit Card Offers for 2012
Some of the best credit card offers of 2011 came out near the end of 2011 so listing the best credit card offers for 2012 at the end of 2011 may be premature. However here are our predictions for the best credit card offers of 2012. 2011 saw some of the best credit card offers ever. Remember the South West Rewards Offer? We also love the Chase Sapphire Preferred.
We think that 2012 is going to top 2011 for great credit card offers. This is mainly because of the absolutely fantastic money banks and credit card companies make off of credit cards. This has become more important as banks are searching for more ways to make money off of their customers as new legislation has made it more difficult for them to charge overdraft and other banking fees. Credit cards are one of the sure ways to add to the bottom line. Knowing this, banks are definitely going to be competing more than ever for your business in 2012.
1. 100,000 Points for Signing Up With No Minimum Purchase
There will be at least two credit card offers that will give the customer 100,000 points for signing up. In 2011 British Airways and American Express used this tactic. We are not saying that credit card companies are just going to start giving away 100,000 rewards points to everyone. The competition for qualified clients is going to heat up in 2012. The credit card issuing banks know that the right clients are worth paying up to $1,200 to build a relationship with them.
2. $300 to $500 Cash Back for Signing Up
Once again it is all about the competition. Qualified potential customers will have a multitude of options for credit cards. 2011 saw several $200 cash back offers. We expect to see several offers increase this amount due to the competition for qualified customers.
You have to remember also that there is a certain amount of breakage in any offer. This means that the banks are counting on a percentage of people who sign up for an offer failing to go through the steps to qualify for the sign up bonus. That is why there is usually some catch in a sign up bonus offer. For example, in order to get you $500 cash back, you need to spend $1,000 on your card in three months. Some portion of people who sign up for this card because of this offer will not spend the money and not get the cash back. This allows the card companies to increase the bonus offer amount in order to get good customers.
3. 3 to 4 Free Flights
Airlines and credit card companies are the perfect partners. They both operate in nearly commoditized businesses meaning that it is just as easy to switch airlines as it is to switch credit cards. Both airlines and credit card companies pay a premium for loyalty. Loyalty is a precious customer trait when the customer acquisition cost is so high. It makes perfect sense for these two industries to partner on customer acquisition. Both industries are expecting the number of qualified customers to decrease in 2012 while the competition increases. This will result in increased value for those of you who can qualify for the sweet offers.
4. 0% APR on Balance Transfers and Select Purchases for 24 Months or More
The best offer we saw offered regularly in 2011 was a 0% APR on balance transfers for 21 months. Like all offers we expect this one to increase due to competition. It may seem to you like a loss leader, but the credit card companies love offering this to customers. The card companies still make money on the purchases, and clients are much more likely to stay with the card company for the duration of the 0% APR period. Moreover, the law of client inertia takes over. This law dictates that the longer a client stays with a card the longer they will stay with a card.
5. Reduced Annual Fees or No Annual Fees
Banks and card issuers are always looking for ways to make more money from each customer. But I predict that the theme for 2012 is going to be about gaining market share and we expect the card issuers and banks to pull out all of the stops to get more customers. This means you’ll see more reduced fees and the elimination of fees in some cases. (Citi Simplicity started this trend in 2011)
Conclusion
We are hoping that all of these predictions come true. Even better, we hope to see it in one offer, though that might be a little too much to hope for. In any case, we expect to see some of the best credit cards in 2012.