This Week in Credit Card News: September 10–16
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Activate 5% cash back quarterly reward credit cards for Q4 2021; American Express offers 6 months of Audible Plus for free; Buy Now Pay Later: A worthy competitor to credit cards?
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Activate 5% Cash Back Quarterly Reward Credit Cards for Q4 2021
- If you have any of the following 5% cash back cards, it’s time to activate your categories for Q4 2021: October through December.
- Chase Freedom Flex℠ (Review):
- New categories are Walmart and PayPal.
- Learn about the Freedom Flex’s 5% categories.
- Discover it® Cash Back (Review) and Discover it® Student Cash Back (Review):
- New categories are Amazon, Walmart.com, and Target.com.
- Learn about the Discover it Cash Back’s 5% categories (5% cash back in rotating categories is available up to $1,500 spent per quarter, then 1%; activation required)
- U.S. Bank Cash+™ Visa Signature® Card (Review):
- Choose your own 5% and 2% cash back categories from a large selection.
- Citi Dividend (discontinued for new applicants)
- Chase Freedom Flex℠ (Review):
American Express Offers 6 Months of Audible Plus for Free
- American Express is providing a six-month free trial of Audible Plus. To be eligible, you must:
- Have a U.S. American Express card
- Be located in the U.S.
- Be a new Audible Plus subscriber
- Offer expires February 28, 2022.
- Audible Plus provides access to a large collection of audiobooks, podcasts, and other content, but it doesn’t include any credits to purchase titles.
- If you don’t cancel the free trial, your account will auto-renew at the current rate after six months.
- See American Express consumer cards and business cards.
Buy Now Pay Later: A Worthy Competitor to Credit Cards?
- Buy Now Pay Later, or BNPL, refers to no-fee installment plans used by retailers to offer short-term financing to customers. The most interested customers tend to be those who can’t qualify for credit cards (or who’ve maxed out their cards). BNPL plans are typically seen as easier to understand than credit cards.
- Major BNPL companies operating in the U.S. include Klarna, Affirm, and Afterpay. You’ve probably seen BNPL offers on retailer sites: $119.99, or 4 interest-free payments of $29.99.
- Installment plans like these have been around for a long time, like at furniture stores, but BNPL is gaining steam as an easy and convenient financing method — an expensive item is easier to afford in several installments, and with no credit check (or just a soft inquiry), there are few barriers. C+R Research found that 51% of consumers used BNPL during the pandemic.
- A BNPL plan typically costs more than a credit card transaction for the retailer, but more and more companies are using it to gain new customers who otherwise wouldn’t make a purchase. Shoppers spend more when BNPL through Klarna is an option, according to Macy’s CEO Jeff Gennette, and it’s attractive to younger customers.
- Now, some major credit card issuers and related companies are making their own forays into BNPL:
- American Express, Chase, and Citi have installment plan options: Amex’s Pay It Plan It, My Chase Plan, and Citi Flex Plan. Chase hinted at more BNPL plans in the future.
- U.S. Bank is testing BNPL and has plans to pursue it.
- Capital One has plans to test BNPL this year with a select set of retailers.
- Wells Fargo and Bank of America are looking into adding installment options to their credit cards.
- Synchrony, the largest issuer of private-label retailer cards (and therefore a prime target of BNPL), is releasing an installment plan in October.
- Visa began a BNPL pilot program in 2020, offering installment plans with some companies.
- PayPal is buying Japanese BNPL startup Paidy (PayPal already offers a BNPL plan — Pay in 4).
- Amazon will be partnering with Affirm, while it considers replacing Chase as issuer for its consumer reward cards (Walmart is already an Affirm partner).
- Sources: MarketWatch; American Banker (1); American Banker (2); PayPal Newsroom; Visa; Investor’s Business Daily; Reuters
Brendan has been writing about personal finance for over eight years, and is now taking on the challenge of bringing high-quality credit education to the masses. He makes sure that Credit Card Insider is covering the most important credit topics transparently and precisely, and that we have up-to-date reviews of credit cards so you can find cards that are right for you.
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