Although credit card companies have been making it more difficult for consumers to gain access to new credit cards and reducing the quality of 0% offers all year long, the credit card market has help up surprising well. Until now. David Reilly of the Wall Street Journal eloquently described the present situation for credit card card issuers as the, “worst of time and the worst of times.”
Why? Credit card issuers are being hit with a Perfect Storm. Both Bank of America (BAC) and Citi (C) announced rising credit card delinquencies in the past few days. This, of course, cuts into their profits. However, this shouldn’t have been a surprise to anyone. What makes this situation particularly dire is the freeze up in commercial lending. The credit card companies are being forced to pay significantly more to borrow the money they lend to consumers, cutting deeply into their profits.
Without a sharp and immediate decrease in the cost of borrowing money for banks, consumers can expect to see higher interest rates and the quick elimination of 0% APR offers. If the credit crunch continues to worsen, the concept of a 0% APR may soon be little more than a memory.
Smart Balance Transfers has been sounding the alarm for quite a while now. Consumers paying double digit interest rates on their credit card debt may want to start listening. If you don’t lock in a 0% APR now, you may not be able to find one soon.
To learn more about available 0% APR credit cards, please see the credit card offer section of this website.
