Weekly Credit Card Lowdown: Jan. 7, 2021
Our summary of the top credit card news this week
We’ve been struggling to emerge from holiday cookie-induced comas this week, but credit card issuers are wide awake. Between news of an unselfish fintech promotion and even more short-term rewards deals, 2021 is off to a running start in the credit card space.
Our weekly credit card news roundup contains all the things you should know about the cards in your wallet, other available offers, and new product announcements or reports that made our ears perk up while getting into the new year groove.
What’s the Lowdown?
Here’s what caught our attention between Jan. 1 and Jan. 7, 2021:
Petal Actually Wants Cardholders to Give Them Less Money
The fintech, which is the brains behind the Petal 1 and Petal 2 credit cards, has announced a sweepstakes called “Pay More Than The Minimum” to encourage cardholders to follow these classic personal finance words of wisdom: “Pay off as much of your card balance as possible each month to reduce interest costs.”
The incentive for paying off more of your card bill? The chance to win up to $500 more toward your card balance. Petal will pick 100 sweepstakes winners via random drawing (50 in January and another 50 in February).
Given that bank bottom lines benefit from your interest payments, it's unusual to see a card issuer or brand encouraging consumers to avoid that cost—but we’re here for it. For more sweepstakes details, see “Petal Contest Motivates Cardholders to Reduce Debt.”
Amex Adds Extra Offers to Travel Cards—Again
Since the start of the pandemic, banks have encouraged consumers to hang on to their high-annual-fee travel cards by adding more ways to earn points and statement credits that don’t involve booking a hotel stay or flight. American Express is among the latest to keep the limited-time deal party going. Its new offer line-up is mostly aimed at those who carry some version of the Platinum Card.
Got the consumer Platinum Card in your wallet? You can earn up to $180 back in statement credits on PayPal purchases, and up to $1,700 back on qualified purchases with online retailers including Instacart, BestBuy.com, and Home Chef (both offers run through June 30, 2021). The consumer Platinum Card comes with a steep $550 annual fee, so those are sweet deals if you’re staying close to home and doing a bit (or a lot) of online shopping instead of traveling.
If you have the Business Platinum Card, there are new offers for you, too. Amex teased that more limited-time deals are coming soon for some airline- and hotel-branded cards.
To learn more about these short-term perks, read “Amex Unveils New Pandemic Perks for Travel Cardholders.”
COVID-19 Gave Us Sourdough, 2 Taylor Swift Albums, and Lower APRs
Bright sides of the pandemic are few and far between, but lower credit card interest rates are definitely one. The Balance has been tracking card rates since October 2019, and just recorded one of the lowest overall average APRs to-date: 20.20%. That’s a lower average APR than this time last year, too. Thank the Federal Reserve, which rolled out a pair of rate cuts last spring as the coronavirus spread. We’ve also seen penalty APRs—the rate banks charge cardholders who fall really behind on payments—inch down since this time last year.
Let’s be clear—carrying card debt is still pricey, especially since credit card interest compounds each month. This period of lower rates will only reduce debt costs a smidge, but it’s good consumers aren’t being gouged on top of everything else going on right now.
What Else Is Happening?
- Bank of America Refuels Alaska Airlines Card Bonus: We’ve recorded the first welcome offer boost of 2021: a 10,000-mile increase added to the Alaska Airlines Visa Credit Card. New cardholders can now earn 50,000 miles and an airline companion pass by spending $2,000 within 90 days of opening an account. Those extra miles are worth $425, based on our calculations, and the companion pass is good for one year once you earn it, which is nice if you're avoiding air travel right now.
- Navy Fed Squeaks Out New Balance Transfer Deals: It’s been ages since we’ve recorded a brand new balance transfer offer, but Navy Federal Credit Union put out three on Tuesday for its cashRewards, Go Rewards, and Platinum cards. The offers aren’t particularly long, and only one is a no-interest deal, but if you’re a credit union member looking for a way to cut debt costs, one of these cards—which already had below-average interest rates—may be a decent option.
- Citi Prestige Travel Credit Can Be Earned on Groceries & Takeout: If you open or already have the Citi Prestige Card, you can earn this year's $250 travel credit by using your card at grocery stores and restaurants rather than for travel. Given this is a high-annual-fee travel rewards card, this option makes the card slightly more appealing if the couch is your only seat assignment these days.
- Wells Fargo Is Offering Some Propel Card Holders Extra Grocery Rewards: If you have the Wells Fargo Propel American Express Card, check your account to see if you can earn 5 points per $1 spent on groceries (up to $3,000 spent) through the end of February. We read rumors about this targeted offer on Reddit, and on Wednesday, Wells Fargo confirmed in an email to The Balance that some cardholders were indeed extended that sweet offer. It’s a top-notch grocery earning rate for a no-annual-fee card, so if you can, take advantage of it while you still have time.