More credit card offers coming to your mailbox

Banks that issue Visa and MasterCard credit cards can now also offer customers American Express and Discover cards. OK, so the earth didn't move. But, in fact, it means the end of years of anticompetitive behavior by Visa and MasterCard. What's less clear is if it means better deals for consumers.

The Supreme Court has let stand a lower court ruling that said Visa and MasterCard's "exclusionary rules" stifled competition. The rules stipulated that any bank that issued Visa or MasterCard could not issue American Express or Discover cards.

American Express has quickly teamed up with MBNA, a financial institution that's the king of affinity cards -- the ones with university or retailer logos. The MBNA-American Express partnership will likely be a great boost for American Express, but consumer watchdogs are hoping customers will reap something more than a Bongo University American Express card.

Linda Sherry, editorial director at Consumer Action, says she doubts consumers will see much change when it comes to getting better interest rates or lower late fees.

"The whole idea of American Express and Discover going into the market is to offer consumers a different choice, so I hope there will be better products for consumers. But the credit card industry is a follow-the-leader industry and they don't like to know that a competitor is getting $39 late fees while they're getting $27."

American Express spokesman Robert Glick says the cards will be designed by MBNA and will meet their customers' needs.

"They'll offer greater value and enhanced innovation and I think there will be an overwhelming consumer response."

What the new cards will specifically offer is the cat that's not being let out of the bag just yet, but MBNA spokesman Jim Donahue says customers can expect rewards-based programs that could include cash back, air travel or merchandise.

"With American Express, we combine the membership privileges with the affinity nature of most MBNA products -- the Penn State American Express card or the American College of Surgeons Amex cards -- and put a rewards platform on top of that and it's a compelling product for many customers," Donahue says.

For many people, all this will mean is that they'll be getting more junk mail. But for those in the market for a new credit card, there could be some interesting offers.

American Express has a reputation as an upper-echelon card, especially with its charge card, which has no pre-set spending limit and has to be paid in full every month. But the company has widened its audience in recent years with the Blue credit card, which allows customers to pay over time and, currently, has a zero-percent APR for 15 months and 3.99-percent APR on balance transfers for the life of the balance. Whether the MBNA-issued revolving credit card will have similar terms remains to be seen.

Discover Card, with its cash-back rewards programs, has always been very competitive even though its playing field was limited by the exclusionary landscape.

"Consumers are the ultimate winners," says Discover Card spokeswoman Jennifer King. "We have five cards and each one has different reward structures. It used to be that airline miles were the most popular. Now it's cash. Cash is the king of rewards."

Curtis Arnold, of CardRatings.com, says don't just toss the offers in the garbage. Read them.

"Some mailings will contain great offers. They're both competitive, and I think that will escalate because there will be so many more banks that can issue the cards. Consumers get inundated, but overall it's a positive because consumers will have more choices and that equates to better terms."

If you're looking for a new credit card, be sure to ask about terms and fees. If you hold an MBNA Visa or MasterCard and you get an offer for an American Express card, read the fine print to determine if it's really a better offer. If the promotion pushes "enhanced services," but says the terms are the same, make sure the enhancements are worthwhile to you, says Linda Sherry.

Check any offers you get in the mail against the offers on the American Express or Discover Card Web sites.

Bankrate.com can help you with your search for the credit card that gives you the best deal and meets your needs. If you're looking for a low rate, no annual fee, rebate or specialty card, Bankrate's credit card listings can make your search easier.