What Will the Credit Card Companies Do To Spark Spending?
The credit card companies have been hard at work coming up with programs to entice consumers to spend more and travel more this holiday season. With the uncertain economy, shoppers are holding on to every penny and looking for the best deal possible. It’s no wonder that the credit card companies and banks have begun to turn to value-added solutions, and laying the marketing on pretty thick.
MasterCard has teamed up with American Airlines to launch “Travel Concierge Sweepstakes.” Visiting their site during the sweepstakes and using the concierge to book airfare, hotels and car rentals gives customers multiple chances to win several different prizes. You can earn $50,000 in MasterCard gift cards or $25,000 in American Airlines gift cards as well as many other great prizes.
MasterCard has also released a credit card inlaid with a diamond and laced with gold known as the “Diamond”; the card has a .02 carat gem embedded in its center. The card will have an annual fee of $1000, and will be issued by MasterCard and Kazkommerts bank. MasterCard is targeting rich people that may have not been hit as hard by the economy. MasterCard plans to issue only 1000 of these cards at a rate of 30 per month. Will the super rich buy into it? We will only know when the card launches on November 13th, 2008.
MasterCard has also teamed up with the Better Business Bureau of Nashville to introduce the TrustCard Prepaid MasterCard Payroll Card. These cards ensure a safe, cost-effective and reliable way to pay employees. Employee salaries will be deposited onto the card and the cards can be used anywhere debit cards are accepted.
The purpose of these alternative programs are most likely to pick up the reportedly poor 3rd quarter earnings from Visa and MasterCard. Mastercard’s third quarter is likely to be marred once again from charges related to an antitrust settlement with Discover Financial Services. MasterCard and Visa agreed earlier this week to pay Discover up to $2.75 Billion to settle the antitrust suit. While Visa and MasterCard are somewhat sheltered from the deteriorating spending habits because they do not lend, analysts expect a huge downturn in transaction volume as consumers cut back on spending.
Consumers should be on the lookout for great rewards programs and getting the most bangs for their buck. Retailers should expect these programs to help stir up the shopping bug again.
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