Customer Acquisition by Credit Card Companies
Since the advent of the CARD Act of 2009, credit card companies have faced a set-back when it comes to customer acquisition. The new rules enforced certain restrictions on credit card companies concerning the methods used to attract customers. Because of this, companies have gotten a little more creative and are offering all kinds of promotional packages and perks. It’s important to note that credit card companies offer all sorts of promotional packages but be careful when signing up for them else you might end up in a pile of debt. Some of the common techniques credit cards companies are adopting to ensure high rates of customer acquisition are detailed below:
Attractive Introductory Rates
When the CARD Act of 2009 was first announced, many of us thought that 0% introductory rates on credit cards would be the first to go. This, however, was not the case. Even today we see numerous cards offering 0% introductory rates in an attempt to increase customer acquisition. Don’t just jump into the first promotional offer you see without reading the fine print. To be applicable for the 0% introductory rates, your credit has to be excellent.
A vast range of rewards credit cards are designed specifically to target customers interested in travelling. Companies offering these cards say they’ll pay for your airplane ticket on a particular airline if you spend some amount of money in the first couple of months. The catch here is that after the first year you’ll receive a heavy bill charging you for annual fee (which ranges from $50 – $500).
Before the CARD Act of 2009, college students were the primary objective of customer acquisition for credit card companies. College students were targeted the most because of they were easier to persuade. This led to a lot of students finding themselves knee deep in debt a few years later. Since the law has been passed, there has been a tremendous decrease in pursuing college students to sign up for credit cards. There are some credit cards designed specifically for young adults which offer rewards for paying off their debt on time.
What is the one reward no one can say no to? Cash! Cash back rewards are by far the easiest way to lure potential customers to sign up for your credit card. After all, no one has ever said no to cash back rewards. The best example of this technique of customer acquisition is set by Chase. Chase offers $150 cash back on $500 worth of purchases in the first 3 months.
Credit card holders are well aware that store cards don’t do much good to your credit score. As of recent, some stores, such as Target, have started offering 5% concession on every purchase. If you have a favorite store that you find yourself shopping at for most of your things then check out the rewards they have to offer. Just be sure to read the fine print first!