Oktober Cardfest
From the October 1996 Issue of CardTrak
With the Christmas season right around the corner bank credit card issuers go through the annual ritual of rolling out their best new card products hoping to capture some of the holiday spirit on plastic. This year a wide variety of new products have hit the scene including one very unique card, offering lower interest rates to consumers who pay more than the minimum amount each month.

Yes, that's right ! Great Rate for More Pay !

Most issuers covet cardholders who charge the maximum and pay the minimum. Consumers who fall into the habit of paying just the minimum will string out their debt for years. For example a cardholder that owes an average balance of $2,000, at today's average interest rate of 17%-18%, and makes the typical minimum payment of 2%, will finally clear off the balance in about 30 years. As you might imagine the total interest generated during this period is about three to four times the original balance.

Little wonder why some issuers have encouraged cardholders to pay less. Last year Capital One offered its cardholders the option of decreasing their minimum payments from 3% to 2% of the outstanding balance. Capital One presented the option as an extra value, requiring a $19.95 fee.

Well this month a major issuer is providing an incentive to cardholders who raise their monthly payments to 3% or 5% of the outstanding balance. Cleveland-based KeyBank has introduced the "KeySmart" card which offers interest rates as low as 8.9% with a 5% minimum monthly payment. The new program comes in many flavors: with or without annual fees; standard or classic and gold. For more information call 1-800-KEY2YOU.

Here's a look at the KeySmart menu: 

KeySmart Classic w/$20 annual fee:           
                           Pay 5%+ receive 10.9% APR
                           Pay 3%+ receive 14.5% APR
                           Pay 2%+ receive 16.9% APR
KeySmart Classic w/no annual fee:            
                           Pay 5%+ receive 12.9% APR
                           Pay 3%+ receive 16.5% APR
                           Pay 2%+ receive 19.8% APR
KeySmart Gold w/$30 annual fee:              
                           Pay 5%+ receive  8.9% APR
                           Pay 3%+ receive 12.9% APR
                           Pay 2%+ receive 16.5% APR
KeySmart Gold w/no annual fee:
                           Pay 5%+ receive 11.9% APR
                           Pay 3%+ receive 14.9% APR
                           Pay 2%+ receive 17.9% APR
WAL-MART MASTERCARD
Joining the October CardFest is a new MasterCard from the home of "Every Day Low Prices", Wal-Mart and the nation's fourth largest issuer of bank credit cards, Chase Manhattan. Beginning October 14, consumers may pick up applications for the card at any one of Wal-Mart's 2,265 stores and via Wal-Mart's Web site at wal-mart.com. Unlike other co-branded credit cards, the Wal-Mart MasterCard does not offer rebates on purchases but rather offers a long-term competitive rate of 14.48%. Better yet the rate is fixed, a rarity in today's marketplace. New cardholders also receive a $10 savings certificate, good on one $50 minimum purchase, when paying with the card at Wal-Mart by April 30. The card also offers a 9.9% interest rate on balance transfers.

SWA VISA TAKES OFF
Southwest Airlines and First USA rolled down the runway with the new 'Rapid Rewards VISA' card. Cardmembers earn a free roundtrip ticket on Southwest for every 16 flight credits earned within 12 consecutive months. Cardmembers earn credits as follows: one flight credit for each one-way flight, two flight credits for a roundtrip, and one flight credit for each $1,000 in card purchases. Cardmembers also receive two credits with their first purchase using the card and receive up to five credits for transferring balances (one credit for each $1,000 transferred.) The card has no annual fee for the first year and offers a 6.9% six month promotional rate. Afterwards the rate jumps to prime +8.65%, or 16.90% with today's prime rate of 8.25%. After the first year, the annual fee is $29 for the standard card and $49 for the gold.

Consumers may apply on-line for the card via First USA's web site or call 1-800-SWA-VISA.

TRAVELPOINTS FOR REVOLVERS
BB&T rolled out its new 'TravelPoints' program offering cardholders who carry an outstanding balance a 20% point bonus during the months they revolve. The new optional card enhancement program offers cardholders one point for each dollar charged, 1.2 points per dollar during months in which they carry an outstanding balance, and a 1,500 sign- up bonus. There are three redemption levels: 15,000 points=$200 Hertz rental voucher; 20,000 points=$250 Marriott Cheque; 25,000 points=round-trip airline ticket in continental U.S. BB&T is charging $39 annually for the program.

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