Barrage of credit card offerings grows into a crescendo

By Laura Bruce / Bankrate.com

Banks that issue Visa and MasterCard credit cards can now also offer customers American Express and Discover cards.

OK, so the Earth didn't move. But, in fact, it means the end of years of anticompetitive behavior by Visa and MasterCard. What's less clear is if it means better deals for consumers.

The Supreme Court has let stand a lower court ruling that said Visa and MasterCard's "exclusionary rules" stifled competition. The rules said any bank that issued Visa or MasterCard could not issue American Express or Discover cards.

American Express has quickly teamed up with MBNA, a financial institution that's the king of affinity cards - the ones with university or retailer logos. The MBNA-American Express partnership likely will be a great boost for American Express, but consumer watchdogs are hoping customers will reap something more than a Bongo University American Express card.

Linda Sherry, editorial director at Consumer Action, says she doubts consumers will see much change when it comes to better interest rates or lower late fees.

"The whole idea of American Express and Discover going into the market is to offer consumers a different choice, so I hope there will be better products for consumers. But the credit card industry is a follow-the-leader industry and they don't like to know that a competitor is getting $39 late fees while they're getting $27."

American Express spokesman Robert Glick says the cards will be designed by MBNA and will meet their customers' needs. "They'll offer greater value and enhanced innovation and I think there will be an overwhelming consumer response."

What the new cards will specifically offer is the cat that's not being let out of the bag just yet, but MBNA spokesman Jim Donahue says customers can expect rewards-based programs that could include cash back, air travel or merchandise.

"With American Express, we combine the membership privileges with the affinity nature of most MBNA products - the Penn State American Express card or the American College of Surgeons Amex cards - and put a rewards platform on top of that and it's a compelling product for many customers," Donahue says.

For many people, all this will mean is they'll be getting more junk mail. But for those in the market for a new credit card, there could be interesting offers.

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