Frequent flier mile cards remain popular among consumers
The Credit Card Accountability, Responsibility and Disclosure Act has put restrictions and limitations on issuers across the country in an effort to provide consumers with more protection. Many are struggling to find new means of profit now that they can no longer spike interest rates and fees. One sector of the industry that is still showing steady success, however, is frequent flier mile cards.
FOX News reports that this part of the industry has not been hit as hard by the CARD Act because it never heavily relied on interest rates and penalty fees. Frequent flier mile card holders are typically wealthy and have above-average credit scores, FOX notes. Issuers rely on annual fees and heavy card usage as their source of income.
Although these companies are relishing success, a 2009 survey by the Aite group found that it may be short-lived. Just 47 percent of consumers said they had an invested interest in frequent flier miles behind other categories, such as cash-back rewards and gift cards.
Credit card debt can result in lasting credit score damage for consumers. Americans have become focused on rebuilding their savings since the recession.