KeySmart (SM), the first and only credit card that rewards customers for paying down their credit card balances, was unveiled today by KeyBank USA, the national consumer finance subsidiary of the financial services company KeyCorp (NYSE:KEY).
With credit card delinquencies at a 15-year high and personal debt troubling consumers and Wall Street alike, the Cleveland-based company now offers a debt-management tool for Americans who want to play a more active role in controlling their credit card debt.
We asked our customers what they wanted from their credit card, said Steve Hucal, senior vice president of KeyBank USA. Our customers told us they don’t want one-time gimmicks such as temporary or introductory credit card rates, which often double or triple after a few months and can worsen their credit situations. What they do want is a product with a low interest rate and payment flexibility that helps them pay down their existing balances. KeySmart is designed to meet these needs.
KeySmart gives consumers the choice of three payment options every month. As an example, on a standard KeySmart card, with a balance of $1,000, a payment of at least $50 will correspond to an annual interest rate of 10.9 percent the next month; a payment of at least $30 will correspond to an annual interest rate of 14.5 percent the next month; and a payment of at least $20 will entitle consumers to an annual interest rate of 16.9 percent the next month. Consumers may also pay their entire balances within the grace period each month and incur no interest charges on purchases. This standard card version comes with a $20 annual fee. KeySmart also comes with other interest rate and fee/no fee options including gold cards, which offer an even lower annual interest rate option.
KeySmart customers who pay the 5 percent payment can pay down their balances nearly five times faster and save about 10 times in total interest as compared to paying a 2 percent minimum payment on other average credit cards. The potential interest savings with KeySmart are real and immediate, and, to the average consumer, can substantially exceed the value of other cards that offer cash, merchandise, automobile or mileage rebates.
“KeySmart encourages consumers to manage their credit wisely,” said Hucal. “By rewarding customers who pay a higher percentage of their balance each month, we help them escape from escalating, revolving credit card debt. And yet KeySmart customers always have the choice to make a lower monthly minimum payment when the need arises.”
“Over the past five years, personal incomes have risen 5 percent while consumer debt has risen 13 percent,” Hucal said. Last year, creditors nationwide mailed out 2.6 billion credit card solicitations, with all sorts of combinations of fees and rates. KeySmart is the only one that rewards consumers for responsible debt management. With sound financial strategies and products such as KeySmart, consumers can begin to reduce the personal debt that they currently face.
KeySmart is available across the country by calling 1-800-KEY2YOU and will be available in the company’s KeyCenter offices in late October. Key intends to patent the KeySmart product.
KeyBank USA is a major national consumer finance company that specializes in credit card, education lending, automotive finance, marine/RV finance and non-branch deposit gathering activities.
KeyCorp (NYSE:KEY), headquartered in Cleveland, Ohio, is one of the nations largest bank holding companies, with $64.8 billion in assets at June 30, 1996. KeyCorp provides consumer banking and finance, investment management and trust, corporate and investment banking, securities brokerage, private banking, and customized financial services to individuals, businesses and other institutions through more than 1,300 KeyCenters and affiliate offices in 38 states.