I’ve been making a point of not actively promoting credit cards right now (especially not ones where the primary benefit is lounge access, at a time where most people shouldn’t be flying), despite that being a major source of income for the blog.
However, there have been several questions about “what to do with cards” in the current environment, and I do have some general thoughts to share for those considering applying for a card in the near future.
If you were going to apply for a new credit card anyway, do so soon (like this week)
If you’re going to apply for credit cards soon, personally I think it makes sense to act sooner rather than later in applying for cards. I don’t have any inside knowledge here, though in general my expectations would be that we’ll see at least one of the following with one or more card issuers as we approach Q2:
- We might see less generous welcome bonuses on some cards
- We might see some card issuers stop accepting applications for some cards altogether
Why? Because at this point we’re essentially in limbo, and nobody actually knows what’s going on anymore. As it impacts credit card companies:
- The stocks of many card issuers have plummeted in the past couple of weeks (though some are rebounding a bit today)
- The initial response for many companies right now is to cut all unnecessary spending, and I imagine that could in some cases include new member acquisition bonuses
- Many credit card issuers are giving people the opportunity to delay making payments, and I imagine in some cases they’re suddenly going to see a lot more people financing purchases, which may throw off some projections
- We may see banks reduce unused lines of credit, as a way of limiting their exposure
- The second quarter starts next week, and I imagine there will be shifts in budgets and strategies for at least some card issuers
Essentially what it comes down to is that the current offers and bonuses all reflect decisions made months ago, and the start of a new quarter is a good time to change direction, especially in a time of uncertainty.
For many card issuers, the focus right now may be on serving existing clients as we see what’s going to happen, and then deciding on a plan from there.
Isn’t a bad economy (sort of) good for card issuers?
One way that credit card issuers make money is through financing charges, so in some ways card issuers do pretty well when the economy is weak.
However, at this point I wouldn’t even say the economy is bad, per se, but rather the economy is just paused altogether. We’re all sitting here waiting to see what happens. It’s that short-term uncertainty that makes me think we may see some changes soon.
What cards should you be considering?
I’m not going to make this a post about “42 different cards you should consider getting now,” and for that matter I’m not even saying that anyone should get a card right now.
Rather I’ll just link to some past posts if you’re one of those people who was considering applying for a card soon, and suggest that if you were going to do so, it could make sense to apply sooner rather than later.
Here are a few routes to take:
- I understand a lot of people are in a financial crunch at the moment, so there are some great 0% intro APR cards that don’t even have annual fees
- See here for the top 10 credit card welcome bonuses for March 2020
- See here for the best small business credit cards
- It’s hard to beat the Chase Ultimate Rewards ecosystem for earning points, especially the Chase Sapphire Preferred for personal cards and the Ink Business Preferred for business cards
- There are some fantastic cards for earning Amex Membership Rewards points, and in particular I like the Amex Green Card
- The IHG Premier Card still has a great limited time bonus
- Delta Amex Cards have limited time welcome bonuses for less than another week
- Alaska Cards have excellent bonuses as well
If you are considering getting a credit card, in general I’d recommend doing so sooner rather than later. Right now we have some truly great welcome bonuses, and I wouldn’t be surprised to see them get worse in the second quarter due to the uncertainty we’re seeing right now.
The whole world is struggling to make sense of the current situation and companies are cutting costs wherever they can, and I expect that will extend to acquiring new customers.