Credit Card Quick

How to make a Balance Transfer Offer Work for you

Introduction

As credit card companies begin easing up on their credit card practices, you may begin to see a steady trickle of credit card offers entering your mailbox. And, along with credit card offers come balance transfer offers.

Balance transfer offers are typically used to transfer higher balance cards onto another card with a more attractive rate. Many times, credit card companies offer low introductory or balance transfer rates, thereby saving the customer from hefty finance charges.

Finding a good balance transfer offer may take a bit of work, but there are plenty of credit card companies out there who are competing for your business.

How a Balance Transfer Works

If you are paying too much in interest charges on your debt then you may want to consider the advantages of credit card balance transfers.

Simply find a credit card that is offering a special balance transfer rate and consolidate your other, higher interest debt onto the lower interest rate card. Pay close attention, however, to the term of the promotional rate, as well as the balance transfer fee, as both of these factors could impact your debt.

Many times, it pays to pay off your debt during the introductory, or promotional, period. However, if you are unable to pay off the debt during that time, pay close attention to the card’s standard APR, as it may be quite high.

Balance Transfer Features to Watch for

A good balance transfer offer will have three, main components:

• A long introductory period
• An attractive introductory rate
• A low balance transfer fee

Most balance transfer offers have an introductory period of between six to 12 months. Depending on your financial goals, look for the introductory period that best suits your needs.

A balance transfer offer often comes with a great, low introductory rate. For example, it is not uncommon to see 0% introductory rates.

Finally, a good balance transfer offer will have a low balance transfer fee. Most balance transfer fees range from three to five percent of the balance transferred, so pay close attention to this fee to ensure that it makes good financial sense to complete the balance transfer.

‘Superprime’ Consumers see Surge in Credit Card Offers

News

Although the economy and the credit sector is still far from being strong, there does seem to be small changes taking place that are giving many economists reason to be optimistic.

Creditors have begun extending credit to excellent credit card customers, also called “superprime” customers, as evident in the increase in credit card offers being delivered to the homes of these consumers.

In fact, credit card promotional mail volume rose 34 percent between September and October, which equals about 180 million pieces of new mail. This level is the highest it’s been since December 2008. It was also the largest month to month increase in credit card promotional mail volume since 2004.

Lower Credit Card Defaults Equal More Lending

The industry has begun to see a small drop in credit card defaults over the last two months, which may have banks breathing a little easier and offering to extend credit a bit more.

As credit card companies begin to spend more for their marketing efforts, many analysts see signs of credit deterioration beginning to subside.

It’s still important, however, to note that total credit card promotional mail volume is still down a whopping 74 percent from this time last year, which is the lowest level in 10 years.

Affluent Customers Only, Please

Only the most affluent customers will likely see an increase in credit card promotional mail, though, as credit card companies are expected to target only those customers with excellent credit histories and large incomes.

The two largest increases were seen from Chase and American Express over the last two months. Much of this activity from JPMorgan Chase & Co. is due to the release of its newest card, Sapphire.

American Express continues to aggressively compete with Chase to capture the wealthiest of customers, as seen by its increase in marketing spending – nearly $150 million more in the third quarter than the second quarter. American Express notes that it will continue to increase its marketing efforts as loan losses decline.

Credit card companies are also pulling out all the stops with their rewards programs in an effort to snag the affluent sector of the market.

Smart Holiday Spending

Credit Card Debt

You don’t have to spend the better part of the new year stressing over bulging credit card balances and high interest rates!

Called “holiday hangover,” it is the time of the year that many consumers cringe when they open their credit card bills. Too much debt and not enough cash means that credit card balances go nowhere while interest rates and fees continue to mount.

This is the year that you can change this, though. Instead of digging yourself into debt this holiday season, change your attitude toward holiday spending and instead spend smart to save yourself from a “holiday hangover” in 2010.

How to Keep your Credit Card Spending in Check this Year:

• Understand retailers’ tricks and be prepared to reject them. It is not uncommon to be inundated with credit card offers every time you walk into your favorite retailer. Although these enticements can be tempting, keep in mind that most retailers charge much, much more in interest charges than major credit cards. The bottom line: you will likely end up spending more in interest charges with retail credit cards, regardless of whether you take advantage of a promotional rate.
• Take your credit card out of your wallet unless you make a planned purchase. Impulse spending is the weak spot of many consumers. You’re out and about when you notice something that you didn’t think you need, but now you can’t live without. Sound familiar? For most consumers, this type of spending is dangerous and all too common. Your best bet is to simply leave the credit card at home until you are ready to make a purchase.
• Make a budget and stick to it. If you do your homework and set a strict budget for all the people on your list you are far less likely to go overboard with purchases, and far less likely to charge up your credit cards.
• Determine your ability to pay off your debt before you make a purchase. If you want to make a credit card purchase, but you know you don’t have the money to pay it off in full next month, sit down and calculate the interest you will be paying. Often times, this bit of reality is enough to make you think twice about hefty purchases.
• Choose the best credit card and put away the rest. You don’t need to use all of your credit cards, and you really shouldn’t. Instead, take the time to compare the rates and terms on your credit cards and use only the card with the best terms and conditions.

Why it Pays to Consider all of your Options when Shopping for a New Credit Card

Introduction

We all remember those days when credit flowed freely. Our mailboxes were crammed full of credit card offers and we essentially had our pick of credit cards.

Shopping for a credit card in today’s economy, however, is decidedly different. We are no longer inundated with credit card offers, and we may not even be eligible for some of the credit cards that, just a few years ago, we could have easily obtained.

Order your Credit Report

Before you begin the process of shopping for a new credit card you must understand where you stand as a customer. To do this, you should order a copy of your credit report from the three, major credit reporting agencies.

If you want further information about your credit score, you can go to myfico.com to get your FICO score. This website also gives you access to financial tools which allow you to see how some of your financial decisions can affect your FICO score, either for the better or the worse.

It is important to understand that most banks will consider you a good credit risk if your credit score is 750 and above, so understanding where you stand is a great, first step when shopping for a credit card.

Consider your Future Plans

Before you apply for a new credit card, consider whether you will make any large purchases in the upcoming months, as a new credit card can reduce your FICO score, which may make it harder to snag a home loan or a car loan (or get a better rate).

You may want to pay off and cut up your old credit card once you have received a new credit card, but reconsider closing the account, especially if you plan to make any large purchases in the upcoming months, as closed accounts lower your available credit, which in turn lowers your FICO score.

Decide on a Card that’s Right for you

If you carry a balance, your first priority should be to find a credit card with a low interest rate. If you travel often, consider a travel rewards credit card, and so on. Make sure your credit card meets your needs and that the terms and conditions of the card make sense for the type of spender you are.

A Practical Guide to Shopping for a New Credit Card

Choosing Credit Card

We all remember the days of free-flowing credit. Our mailboxes were jammed with credit card offers, many of which were willing to offer us outrageously high credit limits and easy terms and conditions.

We all knew this fairy tale couldn’t last, and it sure didn’t.

Things are different now when it comes to credit cards, and that’s an understatement.

If you are interested in securing a new credit card, the road may be a bit more difficult than it was just a year or two ago. For starters, your mailbox is most certainly not full of credit card offers, let alone good credit card offers.

To put the credit crisis into perspective: consumers are expected to witness 60 percent fewer credit card offers this year, following a huge decline of 71 percent in 2008.

Now, that’s not to say that you can’t get a great credit card with a competitive interest rate, it just may be a bit more difficult. There are a few things you can do to ensure that you are approved for the best credit card with the most competitive terms and conditions:

1. Order a copy of your credit report – In order to qualify for the best credit card with the best rate and features, you will need to have a pristine credit report. It is therefore a good idea to check out your credit report to make sure that it is free of any errors or discrepancies. Don’t forget that you are entitled to a free copy of your credit report from all three credit reporting agencies every year.
2. Consider your current level of debt – Creditors, now more than ever, are considering an individual’s income-to-debt ratio when it comes to credit approval, interest rate and credit limit, so if you have a considerable amount of debt, now is the time to pay it down, not take out another credit card. In addition, don’t take on additional credit card debt if you plan on making a large purchase in the near future, such as a car or a home.
3. Consider your wants and needs – You should consider all of your wants and needs before applying for a credit card. Do you need a card with a low interest rate? Are rewards important to you? Is a large credit limit what you need? Take all of these factors into consideration before applying for a credit card that might not be right for you.

Tips for Finding the Right Credit Card

Choosing Credit Card

If you have managed to keep a sparkling clean credit history and have earned the bragging rights of a great credit score then you are one of the lucky few to have your choice of credit cards. Individuals with great credit can expect a barrage of credit card offers, mainly through direct mailings.

So, how do you find the credit card that is best for you?

1. Decide what you need – Do you need a credit card for personal use, or will you be using it for business, as well? Do you need a high credit limit, or is flexibility and a low interest rate more important to you? It may be a smart idea to make your list of credit card must-haves before you begin your credit card search.
2. Compare current interest rates, fees, terms and rewards online – A quick search of the Internet will yield many websites offering current information regarding credit cards. You may want to begin your search for current interest rates on some of the most popular credit cards, and determine which companies are offering the best deals. You may also want to check current special offers, such as 0% balance transfers or promotional interest rates to see which ones work best for your situation.

You will also want to check some of the most popular rewards programs, as well, as you may find a rewards-type credit card that best fits your needs and wants. For example, if you are a frequent traveler, then you may want to check credit cards that feature airline reward points.

1. Sort through credit card offers – After you have done your research and compiled your list of must-haves, you can begin sorting through the credit card offers you have received in the mail. Shred all offers that you don’t accept, and make a pile of credit card offers that you want to research further. You may also want to check online offers for credit cards, as well.

Once you have narrowed your choice down to one or two credit cards, carefully read the terms and conditions of the credit card and, most importantly, make sure that you understand all of the card’s small print before entering into a contract with the company.

Taking Responsibility – How the Credit Crisis has Changed the Way we Use Credit Cards

Introduction

It seems like it was just yesterday when the economy was strong, the housing market was booming and credit was flowing like water. Credit was not only easy to come by, but downright effortless at times.

Even those individuals with poor, little or no credit were being inundated with credit card offers. Fast forward to just a few years later and we find that the economy is weak, the housing market is flat and credit isn’t all that easy to come by anymore.

The recession has affected us all in one way or another. Even if we are fortunate enough to have our jobs and our home, we are all discovering that obtaining credit isn’t for just anyone anymore.

Credit card companies, having been burned in the past by easy credit and delinquent credit card holders, are now recognizing that they must become more choosy with whom they will extend credit.

How the Credit Industry has Changed:

• Don’t expect to obtain personal loans and auto loans without providing documentation regarding your income and your credit worthiness.
• Don’t expect to receive credit of any kind without a strong credit score. If your credit score is weak (anything below 700, according to many industry standards), order a copy of your credit report from all three of the credit reporting agencies and make it a point to begin repairing your credit.
• Don’t expect to miss your credit card payments without being penalized. Credit card companies have adopted much stricter rules and regulations regarding delinquent credit card holders in an attempt to encourage individuals to pay their credit cards on time every month. In fact, many credit card companies now raise a card holder’s interest rate if he or she misses just one payment.
• Don’t expect to obtain loads of credit if you have too much debt. Now more than ever, credit card companies are especially aware of an individual’s debt-to-income ratio. In fact, they are using this number as a guide when extending credit.

Calculate your debt-to-income ratio (take your current income and consider how much of that goes toward paying debt each month) and, if it’s above 30 percent, consider ways in which you can pay down your debt before applying for a credit card or personal loan.