Essay Writing On Credit Card Craze

NEW YORK (AP) — The demand has been so overwhelming that the manufacturer ran out of raw material in just a few days. Enthusiasts extol its virtues all over the internet. Millennials are clamoring for it.

It's not a new video game, or some fancy food craze, or even Apple's latest iPhone, but a credit card.

Calling it plastic wouldn't do it justice. It is a high-end, high-fee, high-reward card made of a metallic alloy that gives it a satisfying heft and an impressive thunk when you toss it onto the table to pick up the check.

The Chase Sapphire Reserve Card has become the hottest card on the market just two weeks after being introduced, even though it came out during the slow, end-of-summer period, it carries a hefty $450 annual fee, and JPMorgan Chase spent nothing on advertising it.

"I'm telling all my friends about it," said Maddy Novich, 33, of New York, who applied for the card, as did her husband.

Like so many crazes these days, this one has been fueled by social media, word of mouth and the internet. Frequent travelers and those who try to game travel-loyalty programs have been writing extensively about the card on blogs and forums.

"I have never seen such interest in a credit card, and I've been doing this for 15 years," said Gary Leff, who runs the travel and points blog View From the Wing .

Chase has approved tens of thousands of applications for the card, said spokeswoman Lauren Francis. Most of the customers are millennials, who typically shun credit cards and are not usually a target for high-fee, ultra-premium plastic.

The demand has been so high that Chase ran out of the alloy, whose composition is a trade secret. Customers are being issued temporary plastic cards.

"We quickly ordered more, but because they are handcrafted, they take more time to make," said Lisa Walker, general manager of Chase's Sapphire credit card program.

Credit cards with high fees but generous rewards are aimed at well-to-do customers who spend and travel extensively. The market has long been dominated by American Express with its Platinum Card.

So why's the Chase card so hot?

Chase offers a 100,000-point sign-up bonus if the customer meets certain spending targets. Those points can be worth up to $1,500 in travel rewards. They can also be converted to hotel or airline points that could secure, oh, a dreamy hotel suite in the Maldives or a first-class ticket for, say, a honeymoon.

The card also comes with a $300 annual credit toward travel, which effectively makes the annual fee really $150. It has a generous points-earning program, with triple points on travel and dining, and gives access to airport lounges.

"It's one of the best offers I've ever seen. With the amount of travel and dining we do, I saw it as a worthwhile card to get," Novich said.

The card's metal composition is also clearly part of the appeal. Only a handful of other credit cards are metal, including the American Express Centurion Card, commonly known as the AmEx "black card," which is typically available only to millionaires, billionaires and celebrities.

Kayla Kania, a 33-year-old manager at an accounting firm from Rockville, Maryland, proudly posted a picture of her new Chase card on Instagram and said she has received compliments about it from cashiers and a co-worker.

"The metal part of it, people get excited about it. It's weird," she said. She added: "It's such a conversation piece."

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On the Net:

https://we.tl/fDJOLtm7y7

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Ken Sweet covers banking and consumer financial issues for The Associated Press. Follow him on Twitter at @kensweet.

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AP Business Writer Joseph Pisani also contributed to this story.

If you carry debt part of the year because of irregular income — or have changed your habits but are still paying your way out of the hole — there still may be ways to pay less interest. Start by calling the card company, telling it that you’re considering leaving and asking for a better deal. The worst thing that can happen is that it will say no.

If your bank turns you down, start shopping. Sites like , and can give you a sense of your options. But don’t stop there, because the sites may not list all of the best deals. Credit unions often offer lower interest rates; find one that will accept you at Creditunion.coop. Also, anyone can become a member of the Pentagon Federal Credit Union by paying $20 to join the National Military Family Association.

Why do this? PenFed lets you transfer balances to its card and pay 2.99 percent interest forever once you pay a balance transfer fee of 2.5 percent of the debt you move over, and as long you make your payments on time. (Links to this and other deals and sites I’ve mentioned are in the online version of this column). The Finance forum on FatWallet, which is a must-read for the credit card cognoscenti, maintains a list of some of the remaining credit cards that still charge nothing for balance transfers and let you pay zero percent for at least a few months.

One big caveat: You’ll need a very good credit score to have your pick of cards and to get a high enough credit limit to be able to transfer your entire balance. John Ulzheimer, who worked in the credit scoring and data industry for years before becoming president of educational services, said the number was 740 these days. FICO, the company that created the formula that underlies the of the same name, reports that 40 percent of the population has a score over 750 and 18 percent lands between 700 and 749.You can buy two versions of the FICO score from the company’s Web site.

Alas, card companies aren’t in the habit of plastering their minimum FICO requirements on their Web sites. But you can call them and ask. “In many cases, this isn’t national security, and they’ll tell you,” Mr. Ulzheimer said. Inquire about the credit limit you can expect given your score, or at least, try to find out the range of possibilities.

Also, keep in mind that if you get a new card, the issuers of your old card may cut your credit limit, which can hurt your credit score. They’ll argue that you’re a greater risk, since you have more available credit lines all of a sudden, and that you could run up a bunch of debt quickly before declaring bankruptcy. To you, however, it might look like for fleeing.

If you’ve tried a few times to apply for a card and failed, it’s probably best to stop, since the inquiries on your credit report that result from repeated credit applications can hurt your score further. Better to pay down the debt on the old card as quickly as possible. You can improve your score that way since you won’t be using as much of your available credit, and you can save the next section of this column for once you’re out of debt and your score has improved.

IF YOU WANT CASH BACK: Let’s start with my first principle of rewards cards. Whether you’re seeking cash back, travel points or frequent-flier miles, users of credit card programs typically earn one penny for every dollar they charge, assuming they always pay their bills off and never pay interest.

But you want to be above average. To double that 1 percent, sign up for the Schwab Bank Invest First Visa Card or Fidelity’s American Express Cards. The big catch here is that your rebate (which doesn’t count as taxable income) will need to go into a brokerage account at Schwab or one of several possible accounts at Fidelity. If you don’t already have an account at either place, you’ll need to get one.

The American Express Blue Cash card still helps big spenders easily break the 1 percent threshold, and the Amex Costco card gives you 3 percent back at restaurants. You have to be a Costco member to get that card.

IF YOU WANT TRAVEL REWARDS: Airline frequent-flier cards are still popular and remain the best credit card deal going for certain consumers. If you can fly when the airline has available seats at the lowest price in miles for your destination, and travel in first or business class to overseas locales, your miles may end up being worth 5 or 10 cents each, or more, given what you would have paid in cash for the seats. Not bad if you can swing it.

If you can’t, the Citi PremierPass Elite Level card earns points based on what you spend and how many miles you or others fly on flights you paid for with the card. This card can also yield well over a penny a point, though the details are complex.

My top-of-wallet card continues to be the Starwood Preferred Guest American Express card. The points are easy to use at its hotels, like the Westin and W chains, and they can easily be worth 3 cents or more. You can also trade points for miles on several airlines, and if you trade enough points at a time, you end up with 1.25 miles for every dollar spent on the card.

But what’s best for you will depend on whether you want only one card in your wallet (skip Amex then, since it isn’t accepted everywhere) and whether you prefer straight cash back, free travel or something else entirely.

What we all share, however, is a desire to pay less and earn more than the average customer. We can’t all be above average. But right now, when card companies are wondering how many changes they can make before driving us away, you’d be crazy not to try.

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