Credit card debt forces lenders to get creative with incentives

Credit card debt is falling on a per-consumer basis almost across the board, and as such, it is creating more competition for customers among lenders. The solution many have turned to is increasing incentive programs as a means of luring in consumers.

According to a report in the Chicago Tribune, many credit card issuers are ramping up not only their rewards program, but their advertising as well. Discover Financial Services says it will increase its marketing budget for the third quarter to its highest level since the same period in 2008, and Chase just launched a new “Ultimate Rewards” program with a national ad campaign.

The practical upshot of this new trend is that many consumers can get strong introductory rates or better rewards programs by simply switching lenders, since each is so eager to bring on potential new credit card debt.

Those new rates will, as a result of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, be compelled to last for at least a year, and also require advance notice before the introductory APR can change.