The world of plastic is undergoing some changes in 1991. Current trends involving credit cards include:
* A move to expand your use of cards to include taxis, movie theaters, fast-food restaurants, pizza delivery, supermarkets and health-care providers. The list keeps growing so long as you're willing to pay.
* Dogged determination by banks, pressured by highly publicized economic woes, to keep credit card rates high. They feel they need the money more than you do and that you don't really care how much you pay anyway.
Major mergers of banks which issue credit cards continue. For some card holders, that means their creditworthiness may be reviewed, their credit limits adjusted or their interest rates hiked.
The battle between American Express and bank cards for your business is escalating. You may have noticed that some merchants aren't accepting the American Express card anymore. They contend the company charges them too much, in the form of what's called a discount rate, for the privilege of taking the card.
Keep in mind that this is a terrible year to be running up big credit-card bills.
Among the top 10 bank card issuers, the average rate remains a hefty 19.5 percent and average annual fee is $18 to $20. The average credit card holder holds 2.5 bank cards and eight other credit cards. The average bank card has about $1,500 outstanding on it. While five years ago half of all card holders paid their balances in full each month, now only about one-third do so. So be cautious about credit cards.
"The bank mergers mean that credit card holders must be vigilant not only in terms of any increases in rates and fees, but what's on their credit reports," said Elgie Holstein, director of the non-profit Bankcard Holders of America.
There's been some competition regarding terms, but not a lot.
"For one, American Express has been heavily advertising the 16.25 percent rate it offers on its Optima revolving credit card," noted Kurt Peters, editor of Credit Card News, a banking industry publication based in Chicago. "In addition, a number of credit card issuers followed the lead of AT&T when it offered a 'no annual fee for life' deal the first year its card was in existence, though its worth noting that AT&T ultimately instituted a fee as the second year began last March 26."
Here's the competitive mix: 135 million Visa, 90 million MasterCard, 26 million American Express and 38 million Discover card holders. There's a revolt by some restaurants against the American Express charge card, since the discount rate American Express charges them has been about 3.25 percent vs. about 2.5 percent for Visa and MasterCard. American Express made some adjustments, but not enough for many who accept its card.
"What American Express has done is give merchants an incentive to switch card acceptance from a paper to electronic basis, at which point it lowers their rate," explained Donald Berman, president of Cardholder Management Services Inc., an industry consulting firm in New York.
Shop for the best card deals. A low-interest credit card list is available for $1.50 from the Bankcard Holders of America, 560 Herndon Parkway, Suite 120, Herndon, Va. 22070. Among the best bank card deals available, according to BHA, are:
Arkansas Federal Savings, P.O. Box 8208, Little Rock, Ark. 72221, an 11 percent variable rate, $35 annual fee, no grace period for payment, Visa and MasterCard.