Bankruptcy

Credit Card Offers Begin to Crowd Mailboxes Again

By Chris Kramer

As the economy begins to sputter back to life, various indicators are offering encouraging recovery signs. And, according to this article from msnbc.com, the first quarter of 2010 had one more such indicator: an uptick in the number of credit card offers sent to American households through the mail.

Reasons for the Increase

A combination of factors led to the serious drop-off in mailed credit card offers during the last several months: first, the recession meant card issuers were writing off billions of dollars in debt and none too keen to take on new customers; second, the Obama Administration?s Credit CARD Act tightened many rules governing the way the industry ran.

So what can you expect from the latest batch of credit card offers in your mailbox?

• Targeted to those with strong credit: Sources indicate that the majority of credit card offers are geared toward those with good repayment histories, which isn?t surprising, since issuers are likely eager to issue loans they can expect to see repaid.
• Easier to decode: Part of the Credit CARD Act requires all card offers to have a shortcut box that indicates interest rates, fees and other specifics about the offer to make your decision easier and less confusing.
• More common annual fees: Because new laws restrict some of card issuers? revenue sources, more cards are likely to come with a yearly fee attached.
• Greater rewards offers: Apparently, rewards cards users tend to be good customers for credit card companies, so sources are expecting more of this type of card available.
• Adjustable interest rates: Again, to make up for lost revenue in other areas, more card issuers are expected to issue credit cards whose rates can fluctuate. For this reason, it?s important to read your entire credit card agreement before committing to it.
• Increased fees for balance transfers: Gone are the days of no-cost transfers from one credit card to another. In order to guarantee income, many issuers will be charging transaction fees and immediate interest for those looking to move balances from one card to another.

If You?re Looking for a New Credit Card

This may be good news for people looking to increase their total available credit, but remember: the best offer for you may not arrive at your doorstep, so before selecting your next piece of plastic, be sure to do plenty of online research to make sure you?ve explored all available offers.

Additional Resources

The Credit CARD Act of 2009 (PDF)

Full post as published by The Bankruptcy Blog on May 14, 2010 (boomark / email).