Over the past few months, credit card companies have been sharply reducing the length and quality of 0% introductory offers, slashing credit limits, and raising the requirements on consumers applying for credit cards. And things may be getting worse as the credit crunch wears on.
An article in today’s Wall Street Journal by Mark Gongloff aptly titled, “Credit Cards Next in Line For Tightening,” shines a light on the not so bright future of credit cards. In the article, the author quotes Richard Moody, chief economist at Mission Residential. His words should send a shiver down consumer spines. He states, “Banks are…trying to raise rates and tighten terms on payment.” In other words, if you haven’t locked in a fixed rate or taken advantage of a 0% APR offer, you may be in for some uncomfortable increases in your current interest rate.
Furthermore, credit card companies have raised the credit scores required for approval for many of the best deals, leaving consumers who are looking to refinance to a 0% rate out in the cold. As I’ve written previously, those 0% rates may soon expire as well.
What options does this leave consumers? If you don’t have a 0% credit card, get one now. Not only can you save a substantial amount of interest on your current credit card balance, you can shield yourself against increases. If you’re one of the lucky consumers who does not carry credit card debt, you may also want to consider a 0% APR credit card as an insurance policy in case you may need to use your credit card in the near future.
Whatever your current position, it is better to act now than wait for things to get better. And with a 0% credit card, you can limit your interest expenses during the next year, which may be the roughest many of us have ever seen.
For more information on 0% credit card offers, please review the appropriate section of our website.
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