Why do some credit cards stop being offered?

Some credit cards can stop being advertised and stop appearing on the top of credit card best buy tables, but still be maintained with a client base.  This is what happened with Australia’s first credit card, the Bankcard.

If this happens it is usually a sign that the card is being put into what is sometimes called “run-down” or “cash cow” mode.  In business terms this is when a product maximizes its revenues but minimizes its costs.  It is not unique to credit cards.

In the cash cow stage there is no desire to increase the user base of the credit card.  This means that as well as advertising being cut, interest rates increase and so the credit card stops appearing on the best buy tables.  Grace periods will also get shorter and penalties will increase if the terms and conditions of the credit cards allow for this.

In these situations it is better for a card holder to stop using this credit card and to find a card that offers better conditions.  If there is a high balance on the card then it may be a good idea to look for a “balance transfer” card, which is a card with a low (sometimes zero) balance transfer rate but on which no spending is done.

A good way to know whether a credit card is still being marketed is to look to see if it is easy to find on the card issuer’s home page.  If this is not found easily on the web site then it is very likely to be in run down mode.  Using a search engine will not always produce a useful result as the credit card’s terms and conditions page from the bank may very well appear at the top of the search as there is a lot less competition.

If the card used to appear in a best buy table and it no longer appears there, this is also indicative that the card is no longer being marketed.  The lack of introductory offers, when they were offered before, will also be indicative that the card is no longer being marketed.

It is very rare that a credit card company will announce that they are putting a credit card company in run-down mode until the very end.  Bankcard, for example was only actively offered by one bank when it was announced that the card was going to be discontinued.