Credit Card Rewards: Reverse Robin Hood?

Robin Hood used to steal from the rich in order to give to the poor. Now a public policy discussion paper from the Federal Reserve Bank of Boston gets close to suggesting that credit card rewards programs achieve much the same–except in reverse.

The paper, published last Wednesday, says: “On average, each cash-using household pays $151 to card-using households and each card-using household receives $1,482 from cash users every year.” And it goes on to show that it’s low-income households that tend to use cash and high-income families who receive most through using their credit cards.

Credit Card Companies and Swipe Fees

The Fed’s hypothesis is based on how “interchange fees” (also known as “merchant fees” and “swipe fees”) are levied and funded. These interchange fees are the cut of the transaction value paid by merchants to credit card companies every time a card is swiped. And the paper’s authors argue that merchants pass the fees to all customers in the form of higher prices. They contend:

This retail price markup for all consumers results in credit-card-paying consumers being subsidized by consumers who do not pay with credit cards… cash buyers must pay higher retail prices to cover merchants’ costs associated with the credit cards’ merchant fees. Because these fees are used to pay for rewards given to credit card users, and since cash users do not receive rewards, cash users also finance part of the rewards given to credit card users.

Credit Card Rewards and You

Whether or not you believe the swipe fees system is fair, it is the system. Government can yet change it (it’s been on the agenda for some while), but, in the meantime, there seems little point in your denying yourself the benefits that a good rewards program can bring. So here are three cards that could be of interest:

• Chase Sapphire Card. This card has no annual fee and a generous rewards program that gives you 10,000 Bonus Points after your first purchase. You also get double points on all airfare purchases booked through Ultimate Rewards. And there are no blackout dates, earning caps, or point expiration periods.
• Chase Freedom Card. This card, too has no annual fee. You can earn $100 Bonus Cash Back if you spend $799 on purchases in the first three months you have the card. And there’s five percent cash back on some popular categories and a full one percent on everything else.
• Iberiabank Visa® Platinum. This could be the card for you if you sometimes carry forward a balance, because its rates can be as low as 9.25% APR. You earn a bonus point for every dollar in qualifying purchases, which you can redeem as hotel, gift, or experience rewards. No annual fee with this one either.

Credit Card Use Overseas

On Monday, this blog mentioned the difficulties that some Americans experience when trying to use a U.S.-issued credit card overseas because so many other countries have dumped swipe-and-sign cards in favor of chip-and-pin ones. As the latter’s name implies, these cards have replaced the magnetic strip so familiar over here with a microchip. Some retailers and virtually all automated payment machines can no longer handle American cards. The exception is ATMs, which should still work.

The Kansas City Star addressed this issue Wednesday, and suggested that it may be possible in some countries for tourists and business travelers to obtain–possibly from their hotels–a prepaid card. The card is loaded with euros and contains a chip, which could solve this problem. Why not ask your concierge or check when you book your room?

It’s not yet clear whether American credit card companies are likely to adopt chip-and-pin technologies. A payments risk analyst at the Atlanta Fed wrote a blog earlier this week that suggested that fraud would be cut significantly were they to do so, but also quoted one industry estimate of the likely cost–$8.6 billion. That’s a big investment, although making credit card use easier and safer would be a valuable prize.

Credit Card Debt Doesn’t Only Happen to Bad People

There’s a lot of moralizing that goes on about credit card debt, and people who have been smart enough to avoid it often look down their noses at those who’ve got themselves into deep trouble. So it was refreshing to read Trent Hamm’s “confessional” piece in the Christian Science Monitor last Friday.

Trent, who’s clearly neither bad nor unintelligent, described how he left college with “manageable” credit card debt, but found himself a few years later owing $20,000 on his cards. The monthly repayments on that were costing him more than his rent, and he had reached a point where he simply couldn’t satisfy all his creditors. He’s turned things around now and acknowledges his mistakes, but his explanation for his experience illustrates how human–rather than immoral or stupid–his actions were:

Why did I buy? There was a mix of things going on. Poor impulse control. Career-related anxieties. Lots of stress. All of these things were solvable on their own and buying things I couldn’t afford was merely a short-term salve for them. It was easy to forget that pain if I could go home and read a new book or play a new game for a while.

Credit Card Use Overseas

Yesterday’s Seattle Times explored the difficulties that Americans often face when trying to use their credit cards abroad. Banks in many countries (across western Europe, but also elsewhere) stopped relying on magnetic strips for swiping credit cards many years ago. Instead, their cards contain a microchip, and customers never sign for transactions, instead typing their PIN into a keypad.

This undoubtedly reduces queues at check-outs because it’s a faster process than swiping and signing. It also has some security benefits, partly because it’s supposed to be inherently safer (though not perfectly so), and partly because you never need to lose sight of your card. In a restaurant, for example, your waiter brings a portable terminal to your table and conducts the transaction there.

This is all very well, but what happens to Americans, who don’t have chips in their cards? Well, in theory, outlets should print off a slip and allow you to sign. But some smaller ones don’t. And automatic machines that sell tickets, gas, highway tolls, and so forth simply won’t work. So if you’re travelling overseas (and Canada and Mexico are both introducing “Chip and PIN” at the moment), your credit card use could be affected and you probably should carry more cash than you usually would.

Student Credit Cards

Last week (July 19), the Index Credit Cards news blog mentioned a number of student credit cards that could suit those who will soon be off to college. Today’s Detroit News raised an additional point on the subject that’s worth repeating.

If you’re not convinced that your son or daughter is yet ready for his or her own credit card, then you could always order an additional card for him/her on one of your accounts. Of course, the trouble with this is that your offspring could go off on a spending spree with your credit limit.

However, people with American Express charge cards can set (and later change) individual spending limits on each of their additional cards. Now, try that on your husband/wife/partner, and you may well find that the consequent cost of couples counselling outweighs any savings on your card bills. But use it on your son’s or daughter’s additional card, and you can prevent out-of-control spending, while still being able to up the limit in an emergency.

If you’d like to to have the ability to help manage your child’s student spending, then check out the American Express® Preferred Rewards Gold Card, or other American Express cards that offer this functionality.

You could find the best credit card news you’ve seen in ages.

Credit Card Regulation–a Debate

Back before the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 was passed, consumer groups and financial industry lobbyists disagreed about the new law’s likely outcomes. Those on the industry side argued that the legislation would dam many of the companies’ revenue streams and force them to increase credit card rates and extend annual fees.

And, of course, to some extent they were right. However, a new report, published today by Pew Trusts, suggests that many of the more apocalyptic predictions have not come to pass. Overall, the impact of the new credit card regulation structure has been positive.

Credit Card Rates

Pew says that advertised credit card rates for people with good credit scores have risen since the law was passed, but that the rate of increase has recently declined. Between December 2008 and July 2009, they jumped 23 percent, but between July 2009 and March 2010 they climbed by only six percent.

Those trends were reversed for people with poor credit scores, with rates increasing by 13 percent in that first period and 17 percent in the second.

It’s difficult to assess how much of these rate increases is a result of the Credit CARD Act, and how much is a response to the losses that credit card companies sustained as a result of the economic downturn.

Credit Card Fees

The story for credit card fees is also mixed, according to Pew. For example, fewer (yes, fewer) cards issued by banks had annual fees in March 2010 (14 percent) than in July 2009 (15 percent), but those that did have fees charged nearly 20 percent more.

Meanwhile, overlimit fees fell away dramatically. Back in July 2009, 80 percent of the credit cards that Pew surveyed carried these fees, but that number had dropped to 25 percent by March 2010. The average amount charged for overlimit and late payment penalties ($39) has remained unchanged, but is expected to drop by August when new Federal Reserve regulations that limit them come into effect.

Balance Transfer Credit Cards

By 2009, Pew says, 88 percent of the balance transfer credit cards it surveyed charged fees for those transfers. In March 2010, 10 of the 12 largest bank-owned credit card companies were charging such fees on 94 percent of their cards. And almost all of the companies that levied a fee imposed a minimum amount.

The rate at which balance transfer fees were levied also rose, from a median of three percent in July 2009 to four percent by March this year. Of course, the fact that those are “medians” means that some are lower and some are higher, and Discover seems especially good when it comes to balance transfer fees.

Indeed, one of its products, the Discover Open Road card currently has a zero percent balance transfer fee, while at least two others (Escape by Discover Card and Miles by Discover® Card) are a full quarter cheaper than the current median, at three percent.

Credit Card Regulation–Pew’s Conclusions

The Pew report’s opening paragraph includes a couple of sentences that pretty much sum up its conclusions:

The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 was intended to create a fairer and more transparent marketplace, and initial indicators suggest that it is meeting its goals. One recent survey showed that nearly three in four American credit card holders agreed that their accounts are better off today than they were prior to passage of the new law.

Credit Card Regulation to Tighten?

Last Thursday, the U.S. Senate followed the House’s earlier lead when it passed the new financial reform bill. The law now goes to the President for signature, but some are warning that it could be years before credit card users see much benefit.

Certainly, banks and other card issuers were worried that this new round of credit card regulation could hurt them. A New York Times editorial last Thursday reported figures from the Center for Responsive Politics that estimated that $600 million had been spent by the financial sector in attempts to weaken the bill’s provisions. Of course, the law covers a great deal more than just credit cards, and much of that money would probably have been spent lobbying against other measures.

What’s New?

From the point of view of credit card companies and their customers, the key part of the new law is the creation of a new consumer financial protection bureau. The Times thinks this is a great step forward, saying in that editorial:

The new consumer financial protection bureau established in the bill is a milestone, not only for its intent and power to rectify lending abuses, but because it will institutionalize the insight that the safety and soundness of banks cannot–and should not–be measured by profitability alone, but by the impact that bank practices ultimately may have on consumers.

However, others are less optimistic and some say that the new bureau’s effectiveness could depend on the will of those who run it to take the consumers’ side against the banks. Given that many executives are expected be brought in from existing financial regulators that have less than heroic track records when it comes to this, those with credit cards should, perhaps, not hold their collective breath.

Some Specifics

Supporters of the legislation hope for two principal outcomes:

1. Greater clarity across the board–from the credit card application and agreement through to statements and notices of changes.
2. Agility on the part of the regulator to close abusive loopholes (without the need for new legislation) as soon as credit card issuers begin to exploit them.

Critics say that it could eliminate many of the existing differences between credit card offers, thus closing down much of the competition that currently exists between issuers.

Student Credit Cards

This is the time of year when those who are heading off to college for the first time, and who have yet to apply for credit cards, should begin to research the market. The Credit CARD Act of 2009 has added extra protections for young people (see IndexCredit Cards’ news items), but nobody should think that’s a reason to take less seriously the task of finding the right fit between card and kid.

If you’re a parent with offspring who are in this position, you now have much more control over the choices made than you used to. You need to decide whether you think your son or daughter would be better off with a prepaid card, a debit card, cash, an authorized user card on one of your accounts, or a full-blown card of his or her own.

If you decide on the last of those (and do your research before you reach any conclusion), you may find it worthwhile checking out the following four student credit cards, which have been designed to enhance college life:

• Citi ForwardSM Card for College Students
• Citi® Dividend Platinum Select® Visa® Card for College Students
• Discover® Mix Tape Student Card
• Discover Student Open Road

Credit Cards, Debit Cards, and Prepaid

Right from the start, the people who run credit card companies recognized that so-called “prepaid credit cards” were not credit cards at all. That’s obvious. If you’ve already paid for something before you buy it, there’s no credit involved. The phrase is an oxymoron.

What was needed, obviously, was a snappy, consumer-friendly name for the cards that people would instantly love and want to use. So the marketing geniuses in the credit card companies had a long, hard think, and–after much deliberation–came up with…”Network Branded Prepaid Card.” Just trips off the tongue, doesn’t it?

No surprise, then, that so many people still refer to them as prepaid credit cards.

Prepaid Credit Card Use to Triple?

On Monday, MasterCard published a report that it commissioned from the Boston Consulting Group. This forecast that prepaid credit card use would more than triple between 2009–when its dollar value was $120.2 billion–and 2017 when it is predicted to be worth more than $440 billion.

The report’s authors expect the U.S. to retain its global lead in the sector. In fact, they say that, in 2017, America is likely to account for 53 percent of the world’s prepaid credit card use, which represents a bigger share than double the next six biggest national markets put together.

Why the Jump?

Please say it’s not because so many Americans will have terrible credit scores by then and won’t be eligible for mainstream credit cards.

Unfortunately, that may be partly true, but more new research–published yesterday by Mintel–suggests that consumers’ disillusionment with banks could be at least as important a factor as banks’ disillusionment with individual consumers. Mintel’s press release said:

…19% of respondents overall stated that they would be interested in using prepaid cards to pay bills, rather than a banking account. More importantly, 25% of households earning more than $100K per year, the more profitable and desirable customers for banks, agreed that they would be interested in using prepaid cards. Their main motivation was to avoid overdraft and/or other types of banking fees.

Prepaid Credit Card Terms–a Warning

About nine months ago, the New York Times ran a feature that warned about excessive fees contained in the small print of some issuers’ prepaid credit card terms and conditions. It found wide variations between the amounts levied for all charges, including:

• Application fees
• Monthly maintenance fees
• ATM withdrawal fees
• ATM balance enquiry fees
• Inactivity fees
• Purchase fees
• Fees for calls to customer service

In fact, the Times found that at least one card had up to 24 different fees.

Prepaid Credit Card Applications

Before you sign a prepaid credit card application, remember two of the golden rules for choosing all cards:

1. Make sure you understand all the fees and other charges before you commit yourself
2. Pick the card that is cheapest for your particular lifestyle

So, for example, if you make a lot of ATM withdrawals, eliminate cards with high ATM fees.

Pick a Card

Some cards have been tailored to appeal to particular groups of consumers. For example, Current by Discover Teen Prepaid Debit Card could well suit a young person.

The ACE Visa Prepaid Debit Card has a handy option where you can choose to pay a monthly fee of $9.95 instead of an individual transaction fee on each of your PIN and signature purchases. This could appeal if you mainly use your cards to buy things in stores.

Meanwhile, The Mango™ MasterCard® Prepaid Card has very few fees at all (check them out on this website), and even waives its $5 monthly maintenance fee providing you deposit at least $500 a month. For many, this may well be a “best buy.”

Credit Card Trends: “Lies, Damned Lies, and Statistics”

Writers often have odd lives, which may explain why last Thursday afternoon this one was listening online to a business program being broadcast by the London Broadcasting Company (LBC). That’s London, England. You see? Odd.

An analyst was being interviewed down-the-line from New York, and he was discussing that day’s American financial news. He was particularly enthusiastic about the latest figures from the Federal Reserve about consumer credit in general and credit card debt in particular.

The Fed, he correctly said, had reported that Americans had reduced their credit card balances by $7.4 billion in May, which was an annualized rate of 10.5 percent. He then went on to comment that this was proof of a new prudence and resilience among consumers. You are lucky (although you may not think so) to be reading this column, because his remarks very nearly resulted in the computer on which it is being written exiting a first floor window at speed.

Credit Card Debt–The Reality

The analyst could also have told LBC’s listeners that the Fed’s G.19 Consumer Credit Report shows that credit card debt fell by $19.5 billion in the first quarter of this year. However, he is unlikely to have celebrated the fact that only $800 million of that was a result of Americans paying down their balances. According to the Federal Deposit Insurance Corporation (FDIC), the other $18.7 billion was written off (”charged off” in industry jargon) by credit card companies because they’d given up hope of collecting the debts.

Cheerful headlines reporting some other credit card trends need to be taken with similarly large pinches of salt. Over the last couple of weeks, S&P, Fitch Ratings, and the American Bankers Association have all published data that show declines in card delinquencies (overdue accounts), and these have largely been covered in the media uncritically.

However, some analysts believe that these figures are partly a result of all those charge offs. Because they’ve already eliminated so many of the long-term unemployed and uncreditworthy from their customer bases, credit card companies are left with a greater proportion of cardholders who have had healthy credit reports all along. Other experts think that struggling consumers are prioritizing making minimum payments over everything else (including their mortgages) because they see maintaining the line of credit that their credit cards provide as an overwhelming need. They may not be able to keep that up for ever.

Some Good News

All of this doesn’t mean that there are no signs of Americans tightening their belts and being more financially responsible. The Discover® U.S. Spending Monitor, published July 7, showed that consumer spending intentions dropped two points in June. Unfortunately, much of that was due to a fall in economic confidence.

Of course, after all that gloom, it’s important to recognize that life remains more than comfortable for the huge majority of Americans. Indeed, with so many refinancing at record-low mortgage rates, a large section of the population has never had it so good. And if you still have a pristine credit report, you should regularly review the credit cards in your wallet to make sure you’re still getting the best possible deals.

Discover Great Credit Card Deals?

For no better reason than that the company’s name has already come up, let’s look at a couple of offerings from Discover.

The Discover® More® Card – Black has no annual fee, and is currently offering a zero percent introductory annual percentage rate (APR) for the first nine months. After that, the rate will be between 11.99 percent and 20.99 percent, depending on your credit report. This card’s strength is in its rewards program. You get one percent cash back on everything, five percent on purchases made in particular categories that change through the year, and up to a huge 20 percent on certain purchases made through the Discover online shopping website.

While you’re exploring the range, check out the Discover® American Flag Card. Yes, it offers a good deal to the right sort of cardholder, but it would also look just so good in any pocketbook!

Credit Card Rewards that Make You Work

Susan Stellin wrote a heart-felt piece in the New York Times last week. She’d been a loyal user of an airline-branded credit card for some time, but had become increasingly frustrated by the growing number of hoops she was having to jump through in order to redeem her miles. So she changed credit cards.

She wasn’t alone with her problem. Many frequent fliers have found that being tied to their chosen airline has its drawbacks, especially as many fleets practise “capacity control,” which limits the number of “free” seats available on any given flight. This can make booking a trip on a popular route at a convenient time challenging.

Of course, this isn’t to say that everyone should trade in their airline-branded credit cards. If your flying habits mean that your existing card works for you, then by all means stick with it. And remember that many carriers’ cards offer other benefits (access to lounges, upgrades, no-cost insurance, a free checked bag…) that you should factor into the equation.

Credit Scores Can Be Affected

Another reason to think twice before changing a credit card is the impact it could have on your credit score. According to FICO®, the people behind the most widely used credit scoring system, your score could be damaged if you apply for too much new credit or open too many new accounts in quick succession.

Of course, one new credit card application is unlikely to be much of a problem. There’s a second reason to take care when changing cards. Credit scores are sensitive to the proportion of your available credit that you actually use. And, if you trade in a card with a $20,000 limit for one that offers $10,000, your “credit utilization ratio” can suffer.

To be clear, none of this should stop most people from changing cards, and you should only consider not doing so if you’ve recently made a number of other credit applications and/or are using a large proportion of your available credit.

Travel Credit Card Rewards That Really Reward

Susan Stellin’s Times feature mentioned a number of travel related credit card rewards programs that are particularly hot at the moment. Here are a couple of her tips.

The Starwood Preferred Guest® Credit Card from American Express has won a number of awards recently, including Flyertalk.com’s “Best Travel Card in the Americas.” And it’s certainly the sort of deal that could suit many people. You can redeem points for free nights at 940+ Starwood hotels and resorts in 93 countries, or for flights on hundreds of airlines. And the card’s website claims that there are no blackout dates. There’s also a corporate version of the card, the Starwood Preferred Guest® Business Credit Card from American Express OPEN.

The Times also mentions the Chase Sapphire Card. You get a point for every dollar you spend on the card, which you can redeem for travel on any airline–or you can opt for gift cards, merchandise, cash back, and so on. And there’s no annual fee.

It takes a little effort to track down the card that best matches your lifestyle and needs. But failing to do so can cost you dearly–in stress as well as dollars.

The Good Credit Card News

It’s Independence Day so let’s celebrate the fact that today Americans are less dependent on credit card debt than they have been for a very long time. A quick trip to the Federal Reserve’s website reveals the latest figures. In 2008, revolving credit balances (which are mostly made up of credit card debt) averaged $958.1 billion. In April 2010, that figure was down to $838 billion.

Wow. That’s a reduction of more that $120 billion. No wonder virtually all the big credit card companies are reporting falling levels of both delinquencies (overdue accounts) and charge offs (debt written off because it’s uncollectible).

If you’re feeling in a fragile frame of mind, and simply aren’t up to dealing with bad news, then stop reading now. Because reality is about to intrude.

The Bad Credit Card News

The bad credit card news is that all that good credit card news was plain wrong. Yes, balances are down by $120 billion, but most of that is likely to be because card issuers have written off huge amounts of debt. And that money has fallen off the Fed’s revolving credit figures and into the laps of collection agencies.

Worse, as the Wall Street Journal pointed out Saturday, the reason credit card companies are reporting better delinquency and charge-off rates is because: “Some people have been unemployed so long they have simply been washed out of the credit system and no longer have any effect on the numbers.”

Credit Card Users Face Harsh Penalties

Things can be pretty tough too for those who remain credit card users. MarketWatch revealed last week the results of a survey that suggests too many card issuers retain what it calls a “gotcha” attitude to penalty interest rates.

As if credit card rates aren’t high enough already, many companies impose substantial hikes on those who are even a little late in making a payment. And the survey shows that some issuers use language to explain their penalty programs that is at best unclear, and at worse could be seen as deliberately obfuscating.

Chasing Good Credit Card Deals

When it comes to explaining penalty credit card rates, none of the major issuers scored perfectly in the survey, but one that did better than most was Chase. So, if you prefer to deal with a company that strives for clarity in its dealings you could do worse than explore some of its products.

For example, the Chase Freedom Card offers one percent earnings on all purchases. And you can earn five percent when you buy within certain categories (these change regularly), and an amazing 20 percent on online purchases made through specified merchants.

Meanwhile, if you’re seeking a balance transfer credit card, you should check out Slate from Chase. This card offers a zero percent introductory APR on balance transfers, and some nifty tools that could help you meet your credit card debt reduction goals.

And, finally, the Chase Sapphire Preferred Card could be for you if you particularly value travel rewards. And, right now, you could earn 25,000 bonus points if you spend $3,000 on the card during the first three months that you have it.

Click the links for details, terms, and conditions.

Credit Scores–an Important Change

Wednesday, the House approved the new financial regulatory bill that came out of conference last week. Assuming the Senate also votes it through, a whole new wave of credit card regulation should soon be taking effect.

The bill, of course, covers much more than just credit cards, and one small corner of it contains an important change concerning credit scores. If the legislation is passed, anyone who is turned down for any form of credit, or who receives a less attractive deal (for example, by being offered worse mortgage, loan, or credit card rates), because of a poor credit score should be able to legally demand to see that score.

In fact, there’s nothing to stop you from asking for your credit score even if a loan or credit card application is approved, and you like the deal you’ve been offered. The lender may not be legally obliged to provide it, but many may be happy to oblige.

Credit Reports and Scores–Why They’re Critical

Of course, someone’s credit score and report are likely to determine how good a deal (if any) that person can get on mortgages, loans, and credit cards. But they can be even more important than that.

Yesterday, an Oregon law came into force that stops employers in the state from using credit scores and reports as a factor in any decision to hire, suspend, demote, or fire an employee unless the company can show that the score is directly relevant to the job in question. The law addressed a nationwide problem–some employers routinely (and often unfairly) use credit histories as a way of filtering job applicants and punishing existing employees.

And the situation could become even more critical over here if the U.S. government picks up on an experiment that the British are currently undertaking. The U.K. government has, according to this morning’s Independent, asked a credit bureau to use credit histories to determine whether those in receipt of means-tested state benefits are living an appropriate lifestyle. So, for example, a person who receives housing benefits (has their rent paid) and also has a cable or satellite television subscription could be flagged as someone who may have more resources than they’re declaring, and might thus be cheating the system.

Problems with Credit Reports and Scores

Campaigners in the UK and consumer advocates over here point to the fact that all too many credit reports contain material inaccuracies. John Watts, of the Watts Law Group of Birmingham, AL, said last week that he has recently had several clients whose credit reports contained false information.

Mr. Watts, an attorney with a specialization in debt matters, advises that anyone in a similar position should immediately write to the credit reporting agency–copying the creditor that supplied the information–informing the creditor that the entry is wrong, and giving detailed, precise, and specific reasons in support of that assertion. He goes on:

And if they don’t treat you right? Well, then if you sue them they will be in a position where a judge and jury will be wondering why they mistreated you after you gave them detailed information to show that the company was wrong. In other words – after your precise warning/dispute/request to them.

Making the Most of Stellar Credit Scores

If you’ve been clever enough–or lucky enough–to have kept your credit score at the very top end of the scale, then you should take advantage of your privileged position. Many American Express charge cards and credit cards offer exceptionally good deals for those with exceptionally good credit reports.

And Simmons Bank similarly specializes in catering to the needs of the financially secure. The Simmons Bank Platinum Visa card, for example, currently has a 7.25% variable rate, no annual fee, no balance transfer fee, free travel accident coverage, and free car rental loss/damage waiver.

Low credit card rates are a hallmark of Simmons products, and the Simmons First Visa Platinum Travel Rewards card has a 9.25% variable rate. It has many of the same characteristics as the Platinum Visa card, but also has a credit card rewards program that offers one point a dollar. You can redeem points for free travel on all U.S. airlines.