Most banks today offer their customers some sort of rewards credit card. There are certain benefits you can take advantage of when pursuing an offer from the same bank you already have a relationship with. To make an informed decision, you should know how to extract the full value out of these cards. As you read this guide, know that you shouldn’t limit your credit card search to products offered by just one bank. As with almost all things in life, it's good to shop around and keep your options open.
- Ask for special bonuses and retention offers. Many financial institutions have special bonuses lined up for individuals who are already their customers. However, they aren't always handed to you. In some cases, they may be locked away to customers with a certain deposit level. It never hurts to ask about these special offers. Sometimes they won't be on the table until you do. You should never assume the bonus offered to you in-branch is the best one available. Always double check online whether there are applications available with better sign-up offers. You can also use this trick even if you aren't applying for a new account. Most credit card departments have a customer retention line. If you’re thinking of closing an account, it makes sense to call and see whether they are able to throw any special bonuses your way.
- You'll have the ability to move around funds and make easy payments. Making credit card payments can sometimes be easier when you have a checking or savings account with the same financial institution. Many of the big national banks have mobile apps and online dashboards that allow you to quickly move funds between accounts, or even withdraw them to make a payment on your credit card. This convenience beats having to mail a check or pay over the phone. This set-up allows users to also redeem their points in an easier way. For example, individuals with one of the Ultimate Rewards credit cards can directly deposit cash back rewards into a Chase bank account, if they have one. To many consumers, this may be preferable to ordering checks or gift cards.
- Check for elevated rewards rates. Some banks give extra rewards per dollar spent to customers with certain amounts deposited with them. For example, some Bank of America credit cards are enrolled in the Preferred Rewards program. Individuals with a checking, savings, or investment account with BofA can get anywhere between 25% and 75% more cash back on purchases. This sort of bonus can take a run-of-the-mill credit card and have it beat some of the best offers on the market.
- Applying in-branch can help qualify for hard-to-get cards. Some credit cards may be out your reach if your credit score is too low. When you apply in-branch, however, a banker can help you call a re-consideration line. There, they can make a case for you to be approved for a product based on factors not captured by your credit report. This approach isn’t guaranteed to work, however it does improve your overall chances. You could call the reconsideration line yourself. However, it helps to have someone who works for the issuer in your corner.
You Should Still Shop Around
For all the good you’ll get out of opening a credit card with the same bank, you should still shop around for options. Most of the benefits we outlined above are good for short-term value boosts. However, when it comes to credit cards, you should always be looking at the long-term prospects. You can’t do that effectively by only considering a single bank or issuer.
A recent survey by FINRA revealed that just 35% of people comparison-shop for credit cards. That means 65% of the population is potentially making sub-optimal credit card choices. Take the time to compare credit cards from at least two or three issuers. It’s nearly impossible to make a judgment about a card’s value without understanding their context. A 2% rewards rate can be great if most other banks give you just 0.5%, or awful if the industry average is 10%.
In recent years, the standard to go by has been 1.5%. Most decent cash back credit cards can give you a return on all purchases at that level. Therefore, if your bank offers a comparable product, it is generally worth considering. Individuals shopping for credit cards in regional banks should be particularly concerned with this figure. Many popular community banks throughout the United States offer rewards rates of 1% or less. Even a decent bonus isn't enough to make a card like that worthwhile in the end.