How long can consumers expect free balance transfer offers (0% APR with no transfer fee), such as Chase Slate, to be around?

With the short term interest being so low and likely remain low for the next 2 years, chances are banks will continue to use this feature to attract more customers. Remember that you will be charged the higher interest rate once the promotion period is over. So, you have to have a really good memory and liquidity by the time the promotion period is over before the bank will be able to make some money off this offer.

Why would a major credit card company like Chase not offer cards to people with limited or bad credit?

The name of the product is “credit” card. If you have no credit or bad credit, you simply won’t be able to get your hand on one. It is risky for banks to lend to someone with poor repayment history (bad/no credit). A credit card is essentially a short term lending by the banks. Worse yet, it is not collateralized with other valuables such as title to your car or house. So, banks are extra careful when it comes to “lending” through credit cards. In a major economic recession like the one we’re facing right now, people with poor credits are also more likely to default on their loans. Major banks are more likely to tighten their lending standards during a period like this.

Why do credit card companies often give cardholders more value when they redeem rewards for travel than when they redeem for cashback? For example, the Chase Sapphire Preferred Card's 50,000-point initial bonus is redeemable for $625 in travel booked through Chase but only $500 in cash.

Banks typically got those travel benefits through a bulk purchase from airlines at a significant discount. So, if you redeem travel benefits, the bank actually save more money! With the Covid-19 pandemic, most airlines and hotel chains need liquidity and they’re selling redeemable miles to credit card companies at an even higher discount rate than they used to in order to get some cash upfront. You can expect even more generous travel benefits in the next year or two.

 

This was originally featured on WalletHub's "Ask The Experts" section. To read the full article, visit https://wallethub.com/credit-cards/chase/#expert=Leo_Hung_Chan.