March 16, 2004
With more than 30,000 custom credit card programs available, lenders appear to be playing matchmaker. Perhaps you received one of the 3 billion solicitations they mailed out last year?
Maybe you're happy with the card in your wallet. (There's something to be said for making a long-term commitment to a single lender.) But have you played the field lately? Your match made in plastic may be out there.
From free skin cream from Avon (NYSE: AVP ) , airline miles, or a cheaper Starbucks (Nasdaq: SBUX ) buzz, co-branded cards are big business. According to the Nilson Report, accounts with rewards components reached 56 million last year from 35 million the previous year.
No matter who makes the introduction (even us Fools with our own stunning Motley Fool Visa), make sure you read the fine print and that the card offers rewards you'll actually use.
Rate shop with skepticism. If it's a low interest rate you're after, look for a card that offers a rate that applies for the life of the transferred balance (rare, but out there) or one that lasts for a reasonable period of time. Six months is a good starting point. If you plan to use the card to move an existing balance over, make sure the balance you transfer falls within the credit limits of the new card.
Consult your credit file. Lenders are tightening their requirements for the best deals. If it has been at least one year since you've looked at the goods they have on you, consider peeking in your credit file. (Here's a good deal from our partner TrueLink on a credit report that includes information from all three credit bureaus, as well as your credit score.)
Don't pay to play. Freebies aren't always free. Many rewards cards carry an annual fee. That's not necessarily a deal breaker, but you don't want to overpay for an infrequently used perk. Also, look out for other hidden fees. Lenders are always looking for a way to eke out more money from you -- whether through interest or late/penalty fees.
For help in finding the most flattering card for you, read our guidelines for finding The One -- or at least the one for right now.