In order to further strengthen its foothold in the credit card market, MBNA Europe Bank Limited – a fully owned subsidiary of Bank of America Corporation (BAC - Free Report) – announced the launch of a new credit card. It is named “Everyday," and offers cardholders an all-in-one solution for their daily spending and debt consolidation requirements. Management believes that the card would set MBNA apart in the hugely competitive credit card market.
Apart form offering benefits of 0% interest for seven months on all purchases made through the card, it carries a low annual percentage rate (APR) of 11.9%. Further, the card offers benefits of long balance transfer and the handling fees charged is amongst the least in UK.
The Everyday card provides cardholders with 0% interest for a period of 17 months on all balance transfers carried out within 60 days of opening an account with the bank. Further, it charges handling fees of only 2%.
Through the latest technology – known as Contactless – the card enables the holders to make payments below £20 ($32.3) rapidly and securely without using a personal Identification number (PIN). Such payments are protected by the same technology as chip & PIN.
Management at MBNA believes that the Everyday credit card ranks amongst the comprehensive credit cards introduced by the bank. With a low APR and handling charges, along with enormous promotional benefits, the card will be an asset to the consumers.
Bank of America has been actively issuing cards to further augment its non-interest income. In May, the bank issued travel cards in the U.S., catering to the needs of frequent travelers. The advantages of these cards included absence of foreign transaction fees, no expiry date on points earned, no blackout dates, complimentary concierge service and a bonus each year on the total purchases.
Similarly, Citigroup, Inc. (C - Free Report) and American Airlines (also known as AA) – a subsidiary of AMR Corporation – tied up to launch a new travel benefit card – the CitiBusiness/AAdvantage World MasterCard in the U.S. The card would help small business owners save money and get maximum benefits from travel spending.
Bank of America currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we also maintain our long-term Neutral recommendation on the stock.