Loyalty rarely pays with credit cards

Loyalty is seen as a desirable trait, and is often well rewarded.  Credit card providers may prize loyalty, but that is because they do not have to reward it.

The best deals with credit cards are almost always for newcomers.  This is whether the newcomer is a good or bad credit risk, or has a high, low or medium level of income.  Existing customers are almost always excluded from new offers on a card.

Loyal customers are some of the most profitable customers that credit card companies have.  They do not need to be marketed to, and they do not need special offers to sign up to credit cards.  Loyal customers are also less likely to go into arrears with their payments.  However, it is the loyal customers who will have their card fees and interest rates progressively raised.

These new offers are an often introductory offer, this will last for a short period of time, between one and eighteen months.  This punishes the moderately loyal; who are likely to stay after the introductory offer has run out.  The new offers can relate to very low (or even zero per cent) interest on credit card purchases, instant discounts on goods on signing on for the credit car, enhanced reward points or an increased amount of cash back on a card.

The most sought after introductory offer is the zero per cent interest rate on balance transfers.  This can involve a long period of interest free credit for a substantial amount of money, but only for the disloyal card holder.  A person who signs up to the interest free period but who is still running a balance on the card after the period has run out will be making an overall profit for the credit card provider within two to three months.

Becoming a disloyal customer is easy, although it does take some discipline and self organisation.  Disloyalty is rewarded by credit card companies but it is not something that every card holder can do.  The first thing that a disloyal customer needs to be able to do is to always be looking out for cards that will allow balance transfers from the existing cards.  There is no more expensive loyalty than forced loyalty.

It is also necessary to ruthlessly close cards when they are no longer being used.  After a short period, usually twelve months the card holder will become a new customer and so will be eligible for the new cards.