By Justin McHenry

RevolutionCard, a new credit card that aims to cut credit card fees and increase card security, launched today. Backed by a gaggle of financial and technology heavyweights, including America Online founder Steve Case at the helm of its parent company, the RevolutionCard comes with no name or account number listed on the outside of the card, instead using a PIN code system to verify a cardholder’s identity. It also offers merchants a much lower interchange fee—the fee merchants pay to banks and credit card processors for accepting credit cards—which might be the key to its success in the marketplace.

The RevolutionCard is one of the products from Revolution, LLC, the company formed by Steve Case. In addition to Case, investors include former AOLer Ted Leonsis, former United States Treasury Secretary Larry Summers, former Charles Schwab CEO David Pottruck, and former MasterCard International President and CEO Russell Hogg. It is also partnering with traditional credit card issuers including Citi and CompuCredit to issue its cards.

According to an article in USA Today, the card can already be accepted at 100,000 merchants, and will ramp up to levels equal to MasterCard and Visa over the next three years.

While the RevolutionCard’s security features may entice some, its ultimate success may be predicated on how hard it is pushed by merchants—and it may be promoted very highly.  Revolution claims that traditional credit card purchases cost merchants 1.9% of a purchase, while RevolutionCard transactions will cost just 0.5%. With many merchants either grumbling or outright suing credit card companies over the size of these fees, it’s likely that many will embrace the RevolutionCard. Despite Revolution’s claims that merchants will pass these savings on to consumers, that of course remains to be seen.

More information on RevolutionCard and an online application can be found at revolutioncard.com.

By Justin McHenry

Last year Chase launched its Freedom Card with much fanfare, touting the ability to easily move between cash back rebates and reward points programs, as well as offering 3% back/3 points per dollar on gas, supermarket and fast food purchases. Chase has now announced “the next generation” of Chase Freedom, with a more flexible rewards formula that offers 3% back on your three biggest spending categories each month. By doing so, Chase eliminates a cardholders’ need to remember which categories pay greater rewards while simultaneously increasing the likelihood of the card being used.

Chase Freedom cardholders will now earn the 3% back/triple points in whichever three categories they do the most spending in. The 3% adjustment is made automatically, and the 3% rebate categories can change each month. The 15 categories of spending established for the rebates include: gas stations/convenience stores; grocery stores; department stores; drug stores; fast food and quick service restaurants; movie theaters; movie rentals; dry cleaners; health clubs & gym memberships; beauty salons and spas; pet supply stores and veterinarians; mass transit and local commuter expenses; telecommunications; utilities; and cable/satellite TV and Internet bills.

One other perk of the Freedom Card that has not changed is of interest to those who choose the cash back option.  For every $200 earned in cash rebates, Chase tacks on another $50 free.

By Justin McHenry

American Express last week introduced a very interesting credit card for the small business market. The Plum Card aims to help small business owners who can’t get “trade terms” by offering discounts of up to 2% on early payments as well as interest-free deferrals of up to two months when cardholders pay off at least 10% of their balances in the first month. Business owners pay with The Plum Card and then receive terms closer to what they’d enjoy when paying invoices on credit. The goal is to reward early payments while giving business owners slack when cash flow issues make immediate payment difficult.

Established businesses often receive discounts for paying vendor invoices early, but others can’t get credit at all and must pay up front if their businesses are too small or don’t have a long track record. The Plum Card essentially bridges the gap by paying the vendor immediately while giving more lenient credit terms to the cardholder.

Cardholders that pay their balances in full within 10 days of the end of a billing period will receive the early pay discount, which equates to a one-percent rebate on balances of under $5,000 and a two-percent rebate on balances over $5,000.

American Express sees the card as being targeted especially toward businesses in construction, retail, wholesale, IT/Solution providers, the auto-care after market and others.