Credit Card Quick

Why now may be the Best Time to Look at a New Credit Card

Choosing Credit Card

If you’ve worked hard to maintain a positive credit score and you haven’t taken a look lately at your current credit cards, now may be a great time to understand what you have and what you could have if you take advantage of one of the many new credit card offers.

Consumers with good credit scores are being wooed more now than they have in a few years because creditors are finally loosening their grips on credit and are, once again, offering credit. Because of this, you probably are receiving a plethora of new credit card offers — most of which are offering very attractive rates and promotions.

If you want to take advantage of one of the new credit card offers, here’s what to do:

• Examine your current credit card interest rates, terms and conditions so you have something to compare when you begin looking at new credit card offers. If you have a particular credit card you really enjoy using, you may want to contact the credit card company and negotiate a lower rate or different terms. It is important to keep in mind that it is always best to negotiate better terms with your current credit cards than to open up new accounts.
• If you get nowhere with your current credit card companies, or if the new credit card offers are just too good to pass up, consider paying off any balances on your current credit cards first. It is always best to avoid carrying balances on multiple credit cards because it could put you in a precarious situation if you forget to pay on one of your bills or if you become more spend-happy because you have access to so much credit.
• Amass all of your current credit card offers and compare them, side by side. It is important to not only look at the card’s interest rate, but other factors, as well, such as promotional rates if you are transferring a balance, and the card’s general terms and conditions.
• If you are looking into a rewards credit card, carefully review the fine print, as there is often much more to rewards credit cards than meets the eye.

Are Credit Card Convenience Checks all they’re Cracked up to be?

Credit Card Rewards

Most of us are aware of those credit card convenience checks often sent to us by our credit card company. Sometimes they come with special rates and incentives, and many are sent right along with our credit card bill.

The checks are blank and ready to use. Sounds tempting, doesn’t it? A new pair of shoes, a weekend getaway or even a new vehicle is just a check away.

But before you start spending with your credit card’s convenience checks, you may want to take a step back and consider the advantages – and disadvantages – of credit card convenience checks.

Advantages

• Writing out a convenience check is often much easier than applying for a personal or car loan.
• Ideal for situations where a credit card would not or could not be used, such as paying a contractor.
• Often times, they come with promotional rates that are much better than the current interest rate on your credit card.
• Convenience checks may be an ideal way to consolidate your debt.
• Convenience checks may be useful for paying off medical debt, student loan debt or any other type of consumer debt.
• Convenience checks may be deposited into your bank account for cash.

Disadvantages

• Promotional rates on convenience checks are often short-lived. If you receive a great promotional rate on a convenience check, chances are you will not be able to pay off the debt before the promotional period ends.
• Convenience checks often come with fees. These fees can equal a percentage of the check’s total, or can be a straight fee, depending on the creditor and the offer.  Keep these fees in mind when writing convenience checks, as they may outweigh the benefits of the promotional rate.
• Convenience checks may give the consumer a false sense of security when it comes to being able to pay off the debt. In other words, the sheer convenience of convenience checks may cause consumers to overspend when they might not have otherwise overspent.

Where has my Credit Limit Gone? The Reason why Credit Lines are Disappearing

Credit Card Types

The credit industry is in a bit of a tight situation. The new credit card legislation has changed the practices of the industry, which has left many creditors struggling to make a profit.

As with most everything else, there are positive angles and not-so-positive angles with change. Although the new credit card legislation was designed to help consumers and reign in on the questionable practices of the credit card industry, it has also created turmoil as creditors seek to find other ways to either make a profit or simply keep their losses to a minimum.

Creditors begin to make Changes

A perfect example of this is that many creditors are cutting back credit lines to less-than-stellar customers in an attempt to cut waste; and the easiest way to do that is to cut their credit lines, either by hacking their credit limits or by simply cutting them off for good.

In the past, creditors sought out nearly any type of customer, and did so with low interest rates, promotional rates, and even gifts and rebates. Times have certainly changed, though, and now creditors are scrambling to find these consumers and cut their chances of incurring debt and not paying it back. In other words, creditors must act because their hands are tied and their profits are dwindling.

What we can begin to Expect

Some of the actions from the credit card industry that we can expect to see include: cutting off all inactive accounts; cutting off subprime consumers; and reducing the credit lines for countless others.

Many industry experts believe that creditors may cut nearly $1.2 trillion worth of credit to consumers this year alone, and that by 2010 the number is expected to rise to $2.7 trillion.

For many of us, our credit cards serve as an everyday convenience, as well as a lifeline in case of emergency situations. It is therefore in our best interest to do what we can to keep the credit we already have, as to protect ourselves and our credit score.

Is a Promotional Interest Rate Right for you?

Introduction

Credit card companies know just how to pull us in. Promotional interest rates, also known as “teaser rates,” are a common reason many of choose to apply for a card. But are these promotional rates all they’re cracked up to be?

The answer is decidedly both yes and no.

Promotional rates can be quite beneficial for many credit card customers who are looking to pay off debt or make large purchases. However, to make a low promotional interest rate worth your while, you need to make sure you can pay off the debt within the time frame of the promotional rate. And that time frame is typically between 6 and 12 months for most credit card companies.

If you are unable to pay off your debt within the promotional interest rate time frame, expect to see a dramatic increase in your interest rate, which means a dramatic increase in your monthly finance charges. Some credit card customers simply switch to another promotional rate credit card once their current card’s promotional rate has expired, but that may be tricky, particularly if your credit rating has recently slipped.

Which brings up another point: don’t expect to snag a great, low, promotional rate unless you have excellent credit.

A low, promotional rate should also not be a time when you freely charge purchases because of the low interest rate, as this could create a credit card balance which you can’t pay off before the promotional rate ends. It is therefore extremely important to not view your low, promotional interest rate, as a green light for making expensive purchases.

Finally, it is important to remember that promotional rates may only be applicable on balance transfers or future charges; it is therefore important to read the details of the promotional rate before applying for the card.

Many balance transfer promotional rates come with a balance transfer charge, which can prove to be quite costly, depending on the balance amount you are transferring. Therefore, you will need to decide if a promotional rate is worth your while, considering the card’s balance transfer fees.