Saturday, 15 January 2022

Credit Card Offers Making a BIG Comeback

Credit Card Offers Making a BIG Comeback
01 Aug

Hello and welcome to Your Money 20

I'm Thomas Fox, community outreach director at Cambridge Credit Counseling What weighs two pounds and has the potential to jeopardize my financial future? This stack of credit card offers I'm holding For those that say lending is not rebounding, well they don't see my mailbox each day I've received over 26 offers for credit in the last few weeks, all from major lenders What does this tell me? First, the reports of credits demise are greatly exaggerated

Second, we could be in for another credit boom and bust if you do not learn from the lessons of the previous recession For those of us that maintain healthy credit profiles, there are an abundance of financial opportunities According to Mintelcom for Media, credit card offers growed by sixty nine percent in the first quarter of 2011 In the first quarter 2010, Americans received eight hundred and twenty-six million offers for credit

During the same period in 2011, mailboxes across the country have welcomed more than 14 billion offers Mintel goes on to report that sixty percent of the offers contained some type of incentive, dramatic change from 2010 Primarily consumers who maintain a score of 720 or over are receiving these more favorable offers but those with lower credit scores are also witnessing an increase in solicitations So, what are credit card companies offering? Incentives include cash back, fee waivers, extended teaser rates, and a surprising return of lower interest rates

Many of the people I’ve counseled over the last few years were put off by the credit card industry's adoption of the credit card act, as it led to the reduction of credit lines and the increase in interest rates Model customers had a difficult time understanding why they were penalized but the industry's reaction was foreseeable due to the new market dynamics presented by the act However, as unemployment in the economy shows signs of stabilization lenders have a clearer view of the future, now are preparing to grow their portfolios If you're in the market for a credit card this could be a great time review these offers, but you have to take care before entering new credit arrangements It's a buyer’s market out there, so don't just jump at the first offer landing in your mailbox

Before taking on any new credit cards it's important to review your budget to ensure you can comfortably accommodate the obligation As we've recommended in the past, it's best to repay your credit cards in full but at the very least you should be able to meet the monthly minimum obligation and a healthy amount above and beyond Therefore, take some time to analyze your spending to see if the new card will adversely impact your financial situation If you find that you can manage the new obligation, take time to understand the terms offered to you The Federal Reserve has a great website, FederalReserve

gov/credit card, which helps you understand credit card offers allowing you to compare apples to apples Their interactive site helps you weigh considerations such as interest rates, annual fees, rewards and other features Next, don't make rash decisions with credit offers Although you may not have received offers in the past several years, don’t let the perks make you overlook the potential cost of credit Remember, credit card companies are in the business of making money and nothing is ever free

20,000 travel miles may seem like to you a win but if you're being charged an extra five percent to get those miles, you are indeed paying for it It's best to compare the offers you're receiving with those being offered online; Bankratecom and CreditCardscom have wonderful comparison tools that help you determine the best card for your situation Cards are evaluated according to their offer; you can search for cards based on a host of criteria such as low interest rates, balance transfer, rewards, cashback and frequent flyer miles

Lastly, always review your credit prior to opening any new account An astounding eighty-five percent of consumer credit reports contain some type of error and you pay for what you don't know Credit report errors can not only disqualify you for financing but also trigger higher interest rates Therefore, request copies of your reports from annualcreditreportcom and review them carefully for mistakes before you consider any new financial obligations, credit cards or otherwise

Thank you for watching Until next time, I'm Thomas Fox for Cambridge Credit Counseling

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