At their inception credit cards were reserved almost exclusively for the financially elite. They were originally meant to extend the buying power of those who did not want to bother handling that pesky cash or the indignity of having to write a check. Look at us now, McDonalds reported last year that “plastic” will soon over-take cash transactions at their windows. Who-da thunk it?
However, convenience does come at a price. Visa, based in San Francisco, benefits as shoppers worldwide are beginning to rely more on credit and debit cards instead of cash and cheques to make payments and they get a “taste” (to be said in your best Tony Soprano voice) of every transaction. Guess who gets a cut, your local banc that issued the card to you. Guess who pays these fees, the retailer and ultimately the consumer.
Visa announced, they are preparing for their first IPO (initial public offering of stock) reports say that Visa may raise up to $US18.8 billion in the largest US initial public offering. Traders are astounded that in these times of unsteady financial markets and a global credit crunch that any financial based company could pull this off. But investors are optimistic and eagerly waiting as consumers trade mortgages for plastic.The bright spot in the plastic invasion is good ole capitalism and competition.
The previously mentioned financial elite are not the only people who enjoy great credit card offers now. A large percentage of Americans have dropped in credit levels based on an up and down economy and the banking fiasco. These consumers are a large percentage of the banks income. So, instead of turning consumers away with the same awful credit cards of yester-year they are building better credit cards for fair credit consumers. Having a bump or bruise on your credit in the past meant you were only offered credit cards with outrageous rates and fees on your on money!
Now days a god portion of credit card consumers with fair credit can enjoy credit cards offering 11.9% interest rates, 0% balance transfers and no annual fees. Credit cards for fair credit card holders have certainly come a long way. Of coarse, they come with tricky little features that allow the credit card companies to return to their obnoxious roots if you pay late. All in all though, if are looking for a good credit card while you work on improving your credit rating they are out there if you look around.
A foot note to the IPO that Visa is preparing for; In 2006 when the 2nd largest credit card company in the world MasterCard did their IPO shares rose $7, or 18%, to $46 on the New York Stock Exchange almost immediately. The shares were priced at $39 each, and the initial public offering raised $2.4 billion. They are now trading at $195.00 at the time of this article. Investors are watching this trade closely.
