Wednesday, March 11, 2009

The Best Time Ever to Cut Up Your Credit Cards

You could make $300 for closing your credit card account! Citigroup, Chase, and Capital One are cutting back on their rewards programs, raising interest rates, and increasing fees. American Express recently offered some of their cardholders $300 to close their accounts. Citibank is offering a $100 gift card to those who were signed up for the "Thank You Rewards" program, and sent out a letter stating that they can revoke any rewards program any time they choose.

If you have a credit card with a reward program, you are spending more than you would otherwise. Chase did some research and found that its cardholders that participate in these reward programs showed a fast increase in spending. Yet at the same time the rewards are becoming harder to cash in. But the result of all this is that cardholders with high credit scores are becoming the new targets, and the strategy is to get them hooked in with rewards programs, and then jack their interest rates up, and start adding fees.

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