There's a new credit card on the borrowing scene, and this one is backed by a surprising, social-networking sponsor. MySpace has teamed up with Citi in launching a card with its logo as part of a "Generation Forward" campaign. The card is being marketed as "the credit card that rewards you for doing the right thing," offering perks like a .25 percent APR reduction after three months to active users who stay under their credit line and pay on time.
There's no annual fee on the card and a six month promotional period that comes with a zero percent APR on purchases and balance transfers. However, a 14.24 percent variable APR for purchases kicks in after six months, which is hardly a rate I'd want on my credit card.
The concept of "rewarding" customers for handling credit responsibly is much better than dishing out points to those who spend the most, but credit card carriers make their money from interest — notice there aren't any rewards for paying off your balance every month. This card is targeting young consumers, and I'm concerned the MySpace partnership will woo some to apply for the card without doing their research.
What are your thoughts on the card?
Maine New England
I certainly won't be getting it. I also agree this could lure many young people into getting a credit card who don't need it. Or who haven't been taught how to properly use credit.
1well - i think that it's using an arena that has a lot of equity in it, but i think that it's just as bad as credit card folks on college campuses. there's just something wrong with the thought of getting younger consumers to open cards, when they really don't have the means to pay these things off.
2starangel82 said it right. Count me out.
3I agree with the posters above--a lot of times young people just don't get how credit works and things like this just tempts them into getting into something that can be dangerous.
A few months ago, one of my little brother's friends came to visit me in LA and we went shopping. He tried to buy an outfit for like $100 (or something) and his card was declined. He swore that he had a $500 credit limit so somebody must have used his card, so he called the customer service line to figure it out. It turns out that he had spent $450 in the previous month that he hadn't yet paid off, and he thought that his $500 limit was per month. It was so sad to hear the customer service lady have to explain that to him!
4WTF? How sad is this? I mean, isn't it just common sense that you pay your bill on time and don't spend over your credit limit? This is ridiculous!
5Here's what I want: a credit card that gives you points/rewards/something for paying off your balance every month. I mean, I guess not paying interest is sort of a reward in itself, but a heckuva lot more people would pay off their balance in full every month if they got some sort of benefit from it.
6I wouldn't get it, but I can appreciate the idea of it.
Spectra, isn't the reward NOT paying interest?
7I think the credit card is a stretch, but it will have a target audience, ‘the young and the reckless.’ How about a social network that rewards it's members for social activity? I would suggest users to check out eZanga's, www.HopOnThis.com. They won't drive your credit into the ground like a credit card. Members earn points for social activity and user generated content on the site.
8It's cute.
9I'm not yet of age, but I know exactly how credut works - I have even read finance books, multiple. From rich dad, poor dad to suze orman's book, I feel prepared to handle credit - if not prepared to actually invest money.
My parents, lucky for me, are great examples, going into debt for nothing but a house (not even student loans, I think, though they would support me if I needed one. My dad went to Standford for very little and got paid to go to MIT. Wow. anyways...) - and they have very good credit and low rates on their mortgage and such.
I don't know how many are like me, though.
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