Credit Card Welcome Offers Disappeared for Months. Now, Bonus Deals Are Back in a Big Way
A flurry of new credit card welcome offers has been released within the last month, which is something the industry hasn't seen since the COVID pandemic reached the United States. In fact, for a while, credit card issuers were making it harder for people to get new cards, rather than encouraging new applicants with big cash back bonuses.
The new offers, along with updated and improved terms on popular existing cards, clearly signal that the credit card industry has turned a corner after efforts to attract new customers went into near hibernation this year. Now that the industry is back in full swing, there are opportunities for you to earn unprecedented rewards for opening new accounts.
Credit Cards, Coronavirus and the Economy
Every time a credit card issuer approves a new account, it's taking a leap of faith. Unlike a home mortgage or a car loan, most credit cards represent loans that aren't secured. There's no way for card issuers to repossess purchases if the card holder defaults.
As the COVID pandemic swept through the United States this spring, and large portions of the U.S. economy were shut down, credit card issuers were understandably hesitant to approve new accounts. With tens of millions of people suddenly out of work, it would have been unwise for them to offer new loans to many who may have been unable to pay them back.
And with little interest in offering new loans, there was little reason for credit card issuers to offer bonus cash back or other incentives for customers to apply for a new account.
Credit Card Welcome Bonus Offers Return
While card issuers don't release data on how many new credit card accounts are opened, there was no shortage of anecdotal reports in 2020 of people with excellent credit scores being turned down for new accounts, with small business credit cards being especially difficult to be approved for.
As summer drew to a close, and our economy continued its fragile recovery, the risk of large-scale defaults began to subside. Or at the very least, the risk of a particular borrower defaulting became easier to quantify.
In the last month, there have been more reports of people being approved for new credit cards. Card issuers appear to now be investing in increased introductory offers, improvements to existing cards and even the announcement of innovative new products. Several industry representatives have told me to expect more new and improved offers this fall and winter.
How to Benefit From New Credit Card Offers
Some services, such as travel, telecommunications and utilities, are limited to just few choices. But when you look to apply for a credit card, you can chose from among over a dozen major card issuers, plus countless credit unions and regional banks. The credit card industry is not just extremely competitive, it's also generally profitable, which allows card issuers to offer such generous introductory bonuses.
If you're looking for a new credit card for personal use, you can check out the latest roundup of the best welcome offers, some of which are worth over $1,000. Small business credit cards can have even more valuable offers.
Another thing that you can do to benefit from the credit card industry's recovery is to take advantage of your card's upgraded terms. For example:
- These Credit Cards Are Giving 5% Cash Back at Amazon, Walmart and PayPal for the Holidays
- Capital One Gives You 5% Cash Back on Food Delivery
Bottom line
2020 has been a rough year, and the credit card industry initially became hesitant to approve cards for new customers. Now that its recovery has begun, you once again have the chance to earn valuable cash back and other rewards that are at least as generous as the offers seen before the pandemic.
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