The nation's top credit card lenders are rolling out more valuable rewards to consumers with high credit scores, and while the benefits of those introductory mailings have risen considerably, current borrowing habits may prohibit widespread acceptance.
Consumers' attitudes toward credit card use changed dramatically during the recent recession and though many card issuers are now sending out offers, even those that are being accepted may not be as profitable as they once were, according to a report from the Wall Street Journal. In many cases, affluent consumers may be spending more on their cards than they were in the past, but they may not be carrying the balances they used to as a means of keeping their debt payments down.
"As we come out of this recession, most of the increase in spending we've seen has come from mass-affluent customers," Mark Ford, a senior vice president at PNC Financial Services Group, told the newspaper.
And because of these changing borrowing habits, many lenders are finding that they have to look for new ways to generate revenue with the higher rewards cards, such as mandating that consumers spend thousands of dollars on the card within the first few months it's open to earn the maximum advertised benefits, the report said. In addition, many of these cards now carry larger annual fees.
In general, the amount of outstanding credit card debt has fallen considerably since the end of the recession, as have rates of delinquency and default that may be a sign consumers are carrying more debt than they can afford. However, many experts also say that consumers may soon return to pre-recession spending habits as economic conditions continue to improve.
