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Smaller Banks Embrace Credit Cards Again

Regions Bank offers competitive credit cards for its customers.Following a long absence, small local and regional banks are starting to get back into the credit card business.

The so-called Durbin Amendment to the 2010 Dodd-Frank financial reform law made debit cards less profitable for many banks, which has had the effect of making it more attractive for consumers to use credit cards.

So some smaller banks are getting back into the credit card game to boost revenues.

At the same time, some of the big banks that had swallowed up the lion’s share of the credit card business over the past two decades have been slowly divesting themselves of it.

Bank of America, for example, has sold at least three credit card portfolios back to their original banks.

One of those banks is Regions Financial (www.regions.com) in Alabama. In July 2011, it bought back a $1 billion credit card portfolio from BofA.

If you’re a regular customer of Regions, which does business in 16 states across the South, Midwest and Texas, it might pay to look into the bank’s credit card offerings. (If you don’t have an account with Regions, you cannot apply for a card online.)

While this bank doesn’t have the most generous spending rewards compared to what some of the big banks offer, it does offer extra relationship points, for instance, if you regularly use a checking account at the bank. And these cards also carry lower APRs than the big banks charge.

The no-fee Regions Visa Signature Credit Card rewards you with one point for every $1 in qualified purchases. That’s about standard for many rewards cards. Points are redeemable for gift cards, merchandise or cash credited to your checking account.

But you can rack up even more points, depending on how many accounts and services at the bank you sign up for.

Here’s a look at the credit card details:

APR 12.99% to 19.99%; 0% for seven months on balance transfers.
National Average APR 14.98% (source: CreditCards.com)
Annual Fee None
Rewards 1% back on spending, plus additional bonus points for opening new accounts and making routine banking transactions.
Verdict If you’re a regular Regions customer, you may be able to rack up a lot of points.

For example, you can get an additional onetime bonus of 500 points if you open a savings or money market account or get a mortgage or consumer loan.

If you sign up for online banking or mobile banking, you get 250 points.

You can also earn points for various routine transactions you do, such as 15 points for each monthly recurring automated savings deposit (think direct deposit of your paycheck) and 10 points for a getting a monthly electronic statement (instead of a mailed paper copy).

You even earn five points for each online bill payment you make.

You also earn an anniversary bonus of 500 points each year you’re a customer.

You can also earn a “balance bonus” of 2,000 points if you increase the size of your balances at the bank by $5,000 over the previous year.

Granted, this is not a lot of points per transaction, but over the course of a year they could add up, especially if you’re being rewarded for doing things you would have done normally anyway, like paying your bills online.

In addition to the points, the APR is pretty low, starting at 12.99% if you have good credit, ranging up to 19.99%. There’s also a 0% APR on balance transfers for the first seven months.

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