Recommendations for applying for credit cards. And what it says about the economy.

The economy is strong, as are measures of Consumer Confidence, so the risk to credit card companies may be lower.

And there might be a fight to capture more market share. I think these incentives are worthwhile for the credit card companies. I compare this market share fight to the first round in Monopoly. If you don't capture good properties during that first pass, it is almost impossible to recover and win the game. They are fighting for the best customers.

In any event, there are now great deals for opening a new credit card. No annual fees, or delayed fees, multiple points on purchases for a year or more, etc.

For consumers, this is a great time to open a new rewards credit card, as long as they aren't planning to obtain a large loan, such as a new home. They want to make sure that opening a new credit card doesn't negatively impact their credit rating. And they shouldn't close their old ones. Just stop using them. It looks bad to close credit cards, for some reason.

And, it is important that they recognize how they spend, so that they can select the reward card that matches their spending patterns.

Some of the categories are:

Travel and Luxury Travel

Cash Back

Families

Dining

Airlines

Bad Credit

There are even new ones targeting Millennials, who have disposable income and clear purchasing patterns. These cards even offer specialized perks; higher percentages back for online shopping, smart phone damage protection, and discounts for streaming services. Since the job market is good and unemployment is down, this economic group has much more buying power and the market is noticing.

I also look at the application, and the reward claim processes. I find my Bank of America rewards almost impossible to claim. Every time I try, I get very frustrated. And then I just use my TJMAXX card. They send me reward certificates attached to my bill without me having to do anything. And they have expanded from the 5% on TJMAXX company purchases, to now match the percentages offered by B of A on gasoline, dining, grocery stores, and other purchases.

I dropped the Rite Aid/Plenti rewards because they had issued faculty swipe cards that couldn't be read after a few months, and would not accept the card by reading and inputting the code, even though, if I had purchased something online or over the phone, they would have just taken the number.

Other trends:

Online apps for price matching protection data, and scams related to returns, have caused many credit card companies to drop price and return protection perks. Technology made these unaffordable.

They have also dropped lost luggage - which is a mistake. This is one of the reasons I kept my annual fee AMEX card. That card is looking less attractive, based on recent changes they have made.

For Travel Cards, if they offer perks like free baggage check, frequent travelers will find them more attractive, since the airlines seem to have raised these fees all at once.

By the way, when I was getting my MBA, this would have been an example of price fixing! With the Internet, price changes are common knowledge, so it is harder to say that there was "collusion" in setting prices. Price following is legal.

The question about paying cash is complex. People with huge net worth and quite a bit of disposable income/excess cash still use credit cards to get the perks and cash back offers. People don't just use credit cards because they don't have cash.

But what is also important to understand is that accepting cash is expensive for retailers. And has a higher risk of theft. So cash transactions should have a higher cost in this economy, perhaps. Also, if everyone charges, businesses have to report all the income; it is harder to hide than cash purchases. It is beneficial to everyone to have credit card sales. It closes the Tax Gap. And younger people like the convenience of paying with their phone - which is almost surgically attached to their hands. Why bother with cash?

Now the inconvenience fee is related to paying by cash.

Many more credit card companies are partnering – not just with airlines.

I can now use my Amazon credit card for perks/discounts when shopping at Whole Foods.

And TJMAXX started offering points for other types of purchases.

The traditional retail credit cards are encroaching on the bank credit card markets.

It is a market share war.

My pet peeve is when the redemption process is hard.

Stars are DSW and Talbots. When you make a purchase, they look online and give you all the rewards you are entitled to. DSW lets you use 3 rewards for each transaction.

On the other hand, Giant Eagle is good with gas perks, but when they send coupons to their best customers, the checkout systems often don’t recognize them.

In this market, credit card companies and retailers have to step up their rewards processes and rules; or they will be left in the competitive dust!.