When it comes to credit cards, here is what we should be thankful for:
- An ultra-competitive marketplace. We like to complain about receiving a mailbox full of credit card offers, but this is just a symptom of the intense competition for our business. In contrast to the hundreds of credit cards available, most consumers have only a handful of choices when it comes to television, Internet, and mobile phone providers.
- Incredible rewards. As Americans, we have come to expect points, miles, or cash back for our credit card spending. Frankly, the rest of the world is not as fortunate as we are.
- Super sign up bonuses. As consumers, our business is so coveted that banks are willing to give us huge bonuses just for trying their credit cards. For example, the Southwest Airlines card from Chase now offers 50,000 points, worth $875 of travel, to new applicants who spend just $2,000 within three months.
- Great legal protections. In the event of theft or fraud, Federal law limits cardholder liability to $50. But in practice, cardholders are almost never responsible for any charges that are reported as unauthorized. Since the CARD Act of 2009 was enacted, cardholders have seen most credit card “tricks and traps” banned. And going forward, the Consumer Financial Protection Bureau will address unfair practices that have yet to be devised.
- Generous promotional financing. Banks routinely offer new customers up to 18 months of interest-free financing on both new purchases and balance transfers. So while it is easy to get into credit card debt, banks do offer ways to help us get out of it.
- The 2012 election. Regardless of which candidate you supported, it is clear that the 2012 elections were largely a win for credit card users. Elizabeth Warren, the mastermind behind the Consumer Financial Protection Bureau won a Senate seat in Massachusetts, while the retention of the status quo in Washington makes it unlikely that financial reforms benefiting cardholders will be overturned.
[Credit Cards: Research and compare credit cards at Credit.com.]
Image: rarye, via Flickr