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Which Companies Are Hot? It's All in the (Credit) Cards

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It's hard to separate credit cards from the holiday season anymore, and trends in the industry can mean a big boost to some companies during these high-traffic times.

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Businesses in Line for a Backlash

The companies behind the Worst Credit Cards of 2012: There are a number of decidedly unattractive credit cards out there that will be more of a drain on consumers' finances than a help, so don't count on their respective issuers gaining much traction anytime soon unless they change their strategies.

Among them are the First Premier Bank Gold Card, the US Bank College Visa (NYSE:V) Credit Card, the US Bank FlexPerks Select Rewards Business Card, the Visa Black Card (a not-so-cheap imitation of the famed Centurion Card from American Express), the Arvest Bank Classic Credit Card, and the UBS Preferred Visa Signature Card.

Check cashing stores: Check cashing stores have never been bastions for holiday cheer, as they've traditionally charged excessive fees for their services, adding to the burden of a historically low-income customer base. While their predatory pricing structure might never change, we expect check cashing stores to hemorrhage customers to prepaid card issuers moving forward.

Some of the newest additions to the prepaid card market-namely the Liquid Card from Chase (NYSE:JPM) and the Bluebird Card from Amex and Walmart-allow cardholders to load checks to their cards as well as make cash withdrawals at a very low cost, and are therefore poised to be the check-cashing killers.

Ultimately, it's so important for companies to find success during the holidays because consumers tend to shell out hundreds of dollars on gifts, food, and decor each year before retreating into a type of spending hibernation where the focus is on chipping away at prodigious balances rather than adding to them. In other words, it can be months before it's possible to recover from a lethargic season of sales.

That bodes well for the businesses touched on in the first half of this article, while those unlucky enough to find themselves in the latter half will have to think outside of the box to make the most of their forthcoming lumps of coal. If they can't manage to do so, lackluster investing and losses in the court of public opinion could very well follow disappointing holiday sales figures.


Editor's Note: This article was written by Odysseas Papadimitriou of the credit-card comparison website Card Hub.

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No positions in stocks mentioned.
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