Return of the Credit Card Offer

In the past month I have received over 13 offers for credit cards and car loans. At first I thought I had been added to mailing lists because I recently bought a home, but then I realized the door to credit is starting to open back up.

In 2007-2008 lenders started tightening lending. The fall of the housing market led to many people defaulting on their credit card payments. In addition, the Credit Card Act of 2009 left credit card companies concerned that they would not be able to pull in the revenue they used to receive from high interest rates and over-the-limit fees. They began offering fewer cards and those were only available to people with very good or excellent credit.

Now, the credit card offers are coming back in force. If you have really good credit, this may be to your benefit as most of the new offers contain reward programs. These may be in the form of cash back on on your purchases, 1.25 miles per dollar on every purchase and 10,000 bonus miles, equal to $100 in travel, and other competitive rewards.

There are many things to consider before you open or apply for a new credit card. Here are some simple items to consider:

1. Remember that inquiries (banks looking at your credit report) may have a negative impact on your score.
2. How is your credit right now? Pull your credit report and check to make sure you are in good shape before you apply. There is no sense wasting an inquiry on a credit card for which you will be denied.
3. What is the interest rate on the card? If you pay the card off in full every time you use it, the interest rate may be a mute point, but if you do not, you need to know how much it is going to cost you.
4. Are there any fees associated with the card? This could be in the form of an annual fee, balance transfer fee, cash advance fee, etc. Know what you are getting into.
5. Finally ask yourself if how this credit card is going to help you financially. If your answer is that you do not know, it may not be the right card or the right time for a new card.

If you would like to be removed from pre-approved mailing lists visit OptOutPrescreen and complete the online form. It takes 5 days for the credit bureaus to remove your name from the lists and you may still receive offers from businesses that already purchased your information.

If you need help managing your credit, contact a certified credit counselor. They can help you review your credit report, evaluate your current financial situation, and develop options for improving your finances. Call the number at the top of your screen today!

Published Aug 4, 2011.