The Perfect Credit Card

There are dozens of credit cards out there and many of them offer some pretty substantial perks to lure us to them, not just to apply but to use them each day. There are cards like the Barclaycard Arrival that gives us 2 miles for every dollar we spend anywhere and now there are the new Amex EveryDay card that award the cardholder if they make a certain amount of purchases in a month. We also have cards like the Chase Ink cards that offer the 5 points per dollar at office stores and on telecommunications. We have cards like the Amex Premier Rewards Gold and Business Gold that award 3 points per dollar spent on travel.

These are all great cards and there are other cards just like them that offer similar features. But, no issuer has ever yet presented the perfect credit card. If there was a perfect credit card, what would it look like? What would we want it to look like? 🙂

The Perfect Credit Card

There is the ideal perfect credit card and their is the realistic perfect credit card. The ideal perfect credit card would have the have the best of many of the cards available today.  The realistic perfect credit card would take from some of the different offerings already out there and make a mix of them while expanding on some of them a bit. Here is my list for the ideal perfect credit card:

Ideal Perfect Credit Card

• 100,000 point sign-up bonus – why make this a rare occurrence? Just have it be 100K all the time!
• No annual fee – remember, this is the ideal card, it doesn’t have to match reality! 🙂
• 10 points per dollar – this is already offered on many hotel cards and can be achieved at times when mixed with regular bonus and portal bonuses so why not? 🙂
• Unlimited transfer partners – Just put all the partners together and let us move our points to any we want!
• No spending limit – charge cards have no pre-set spending limit and you can be pre-authorized for large amounts before you make the swipe. Let’s keep that going with this one!
• Unlimited lounge access – just like it says!

Obviously, those wishes are totally outside the realm of acceptable and we will never see a card like that (though I saw something that had some potential in Dubai…).

Realistic Perfect Credit Card

Now we come to the one that I think is more realistic and obviously gives a slight edge to the consumer over the banks. This card, to me, would have a good amount of personal customization by the customer to allow them to get the most out of it. Seriously, we have the software and it should be possible to have a tiny bit of customization already, but we have not really seen that. Remember, the banks are making money by our purchasing as they receive a fee from every merchant who swipes their card. So, it is in the best interest of the banks to motivate us to use their cards more often and on larger purchases. Yes, there are rewards that need to be paid out, but the banks stand to make a lot of money if they reward consumers who make larger purchases because there may be a great chance they will not be able to make the payment and then they can begin to collect interest on them. All of this brings me to my realistic perfect credit card list.

50,000 point sign-up bonus

Hotels offer at least this, airline cards offer this or more on targeted accounts, business cards typically offer this or more and there are routine targeted offers that are higher than this. So, let’s say 50K.

Targeted offers to loyal customers

I know that it is good business to try and lure new customers in since they already have the loyalty of their good customers, but reward them a bit by giving the loyal customers better offers! I have not received a targeted offer from a bank in quite a while – and yes, I have been loyal to them for a while!

Bonuses for years of loyalty

This is going back to the loyalty thing. With banks like American Express beginning to crack down on retention bonuses, I would like to see them offer bonuses for the number of years customers have held a particular card. This would be somewhat similar to insurance companies and their “accident forgiveness” policies. Maybe give a 15,000-20,000 point bonus every 5 years you hold a card.

Selection of bonus categories

There are already cards that offer rotating bonus categories, so we could expand on that. Let’s see a card offer various categories for bonuses. They do not have to be all the same but make them tiered categories. Like, make 5X category options office supply stores, sporting good stores, bookstores, home repair stores, etc. Each consumer would be able to pick 2 options for a list like that and you could change your choice each calendar year (like the airline reimbursement from the Amex Platinum cards). They could do the same with 3X categories. Give the options for things like grocery stores, airlines, gas stations, pharmacies, computer stores, etc. Then have a 2X category list with things like hotels, rental cars, membership clubs (like Costco/Sams), athletic clubs, art stores, etc.

This would be a huge help to consumers and help the banks to have that card used more if it could fit the spending habits and needs of each consumer. For instance, the American Express Premier Rewards Gold card offers 3X for airline travel and 2X for gas stations. Well, what if the person who has that card never purchases airline tickets but does shop at sporting good stores? No way is the average shopper going to spend more at a sporting goods store than airline purchases cost. So, the bank comes out ahead and rewards their customer based on their shopping habits.

Selection of transfer partners

Allow the cardmember to select the transfer partners for their points. Same thing – you must make your selection once per calendar year. This could help the bank since airlines and hotels do make devaluations in the course of a calendar year so the bank could come out ahead if a devaluation occurs. To make it more even, all points earned in that calendar year can only be transferred to the partners selected for that year. But, at least give people some more choices. If you could pick 3 – 5 airline transfer partners and 3 – 5 hotel transfer partners, it would allow travelers to pick the partners that work for them. For instance, there may be some that value domestic airfare and prefer carriers like JetBlue and Southwest. Right now, those are with separate banks. The same would go for hotels. For European focused travelers, it may work best to transfer to Hilton and Club Carlson.

Tiered transfer ratios

There are some partners like Hilton who’s points are drastically lower in value than Hyatt. Allow the transfer amounts to be tiered based on the categories with each hotel. For example, a top-tier Hilton hotel costs 90,000 points while a top-tier Hyatt costs 30,000. So, allow the transfer ratio to be something like 1:2.7 for Hilton and 1:1 for Hyatt.

Allow the linking of your savings/checking account

Sometimes banks can be a little stingy with credit lines. Make it an option for the cardmember to link a bank account to their credit card account that would allow the issuer to set a credit line up above a certain level based on the amount of money in one’s account. So, if the credit line issued was $10,000 but the cardmember would prefer something closer to $25,000, link your bank account to the issuer’s system so that your limit above $10,000 would be based on the amount in your accounts. That could be a fluid limit to reflect your changing amount in your account. Obviously, this would be optional.

Lounge Access

Allow the cardmember to have the option to use points for a reduced rate to airline lounges. Banks already have relationships with the airlines for club access, so give that reduced rate to the cardmember for the cost of points as an option.

Reward based on spending

Give an increase in earning ability if the customer spends over a certain amount in one transaction. For example, if a customer spends over $1,000 20 times a year, allow the cardmember to receive a bonus whether it be in the form of a percentage for that spending (like the Amex EveryDay but just that spending) or some other card perk like a waived annual fee or free rental car days, event tickets, etc.

Summary

Obviously, these are just wishes. I do think we are getting to the point where more customizable credit cards could be issued to better reflect and reward individual spending habits while encouraging more use on certain cards to generate more money for the banks. I think there is room here for a win-win scenario for both banks and consumers that would allow the experience to be more tapered. So, those are mine, what are your perfect credit card perks?