Over the past two years more than four million American households
have shifted $26 billion in credit card debt to home equity loans,
according to a new survey released this month by Atlanta-based Brittain
Associates. Based on a May survey of 6,000 households, about three million
U.S. households totally paid off their credit card debt using home equity
loans. Surprisingly, nearly 1.5 million households remained credit card
debt-free months later. The explosion in home equity lending has been
fueled, in part, by the wide gap between card rates (18%) and home equity
loan rates (9%). Consumers are also attracted to the tax deductibility of
home equity loans and the highly leveraged home equity loan. Some lenders
now offer loans up to 135% of the property's market value. For some
consumers paying off credit card debt with home equity is a short-term
solution to a long-term problem. Unless you manage credit card debt
carefully, consolidating to a home equity loan merely gives you a little
more rope. If you're not careful you lose a lot more than your credit rating.
The hunt for the killer smart payment card application may be ending. This
month Burger King and Mondex USA will launch a pilot to test smart payment
cards in the fast food industry. Thus far, U.S. consumer acceptance of
smart payment cards has been anything but enthusiastic, however this kind
of application could excite U.S. consumers. The Burger King/Mondex smart
card will combine an electronic cash function and a loyalty program.
Cardholders will earn points toward free food items by using a single,
reloadable Mondex smart card featuring the Burger King logo. The test is
being conducted in four NY Long Island-area Burger King restaurants and
will last approximately six months.
Card-dispensing devices inside the Burger Kings will offer pre-loaded
Burger King Mondex cards with $10 or $20 of Mondex value. Customers receive
one loyalty point for every dollar spent. Points are stored on the chip
automatically at the time of purchase. Loyalty points can be redeemed as
follows: 10 points -- free breakfast value meal; 15 points -- free WHOPPER
sandwich value meal; and 20 points -- free value meal of the customer's
choice.
'The British Airways VISA' is back in the market as it was re-launched
this month with First USA. Chase Manhattan dumped the program earlier this
year to team up with Continental Airlines. The new First USA version is
loaded with a lot of punch as it offers a waiver of the first year's annual
fee, one of the lowest interest rates of any major airline card and
automatic membership in the airline's 'Executive Club' frequent flyer
program. The British Airways VISA offers a 4.9% five-month intro rate and a
16.99% go-to rate. The card is available as a 'Classic VISA' for $50 per
year or as a 'Platinum VISA' at $65 per year. New cardmembers who apply for
the card automatically earn 10,000 bonus miles when they make their first
purchase with the card. They will also receive an additional 5,000 miles
after their first British Airways flight. The airline co-branded card
offers the standard one airmile for each dollar charged. For more
information: 800-859-5252.
The X PRIZE Foundation, a nonprofit organization created to jump-start the
space tourism industry, launched a credit card sweepstakes this month with
a grand prize of asub-orbital trip into space. To enter the 'Your Ticket to
Space' sweepstakes consumers need to apply for and use one of six different
'X PRIZE Platinum Visa' credit cards offered by First USA. Card members
receive an entry into the sweepstakes for each purchase. Consumers may also
enter the sweepstakes e by calling a special toll-free number. Thousands of
prizes will be awarded in the sweepstakes, including zero-gravity flights
like the ones used to train astronauts to work in weightless environments,
supersonic flights in Russian MiGs and trips to space camp. The sweepstakes
will award nearly 1,000 prizes annually through drawings every three
months. The first drawing will be held September 15. For more information
call 877-U2-SPACE.
Discover's 'Private Issue' card unveiled its 1998 celebrity artists this
month. Topping this
year's list is country music artist Randy Travis. Discover also named rock
music legend Phil Collins as this year's new celebrity artist. The late
Jerry Garcia has been extended for another year as a 'Private Issue'
celebrityartist. Mr. Travis is
the first country music artist commissioned by Discover. The unveiling of
Mr. Travis' art marked the launch of the fourth series of 'Private Issue'
celebrity art cards. Each year, 'Private Issue' retires the works of two or
more of its artists in order to introduce new works to the collection. As
each artwork is retired, 'Private Issue' funds a National Foundation for
Advancement in the Arts Level I ARTS Award. For more information call
800-4-PI-CARD.
The League of American Theatres and Producers, a 500-member national
trade organization for the Broadway industry, and First USA raised the
curtain yesterday on the new 'Live Broadway VISA' card. Under the new
program cardholders will earn points redeemable for a variety of premium
Broadway items, including theatre
tickets, backstage tours and limited-edition memorabilia. 'Live Broadway
VISA' cardholders will also receive
a complimentary annual membership in the 'Live Broadway Transmedia Dining
program', and advanced notification of special Broadway events and
promotions. After the first purchase or balance transfer, cardholders will
also receive a limited-edition framed poster from one of several current
Broadway hits, including "Chicago"
and "Rent". First USA is offering a fixed 4.9% teaser rate and its standard
go-to rate of 13.99%. The trade group says it reaches 30 million consumers
annually.
