Credit Card Tutorials

Better Economy = Better Credit Card Deals

Remember where our economy was a year ago? During the fall of 2008, the charts of the Dow and Nasdaq looked like some sort of intense rollercoaster ride; slow climbs and steep drops. As the finance sector collapsed, so did credit card deals. Offers for balance transfers and low interest rates quickly disappeared. Even reward cards were having their rebates chopped down. To make matters worse, our spending limits were being slashed “Freddy Krueger” style. Although we’re not out of the woods yet, we are seeing credit card deals make their way back onto the market. Finally, we are seeing banks offer 0% promotions and signup bonuses once again.

Signup Deals
A couple years ago, credit card companies would actually pay us to sign up fro their cards. Many would offer a $50 to $100 bonus simply for applying and being approved. Some cards were even more generous; American Express gave a staggering 25,000 membership reward points to new Gold Card members, plus they waived the annual fee for the first year. Those 25,000 points were enough to get a domestic roundtrip ticket!

Although we haven’t seen that Amex deal come back onto the market (and probably won’t for a while) we have seen some cards offer $50 signup incentives or up to 12,000 airline points.

Interest Rate Deals
With foreclosures surging and the unemployment line growing, it’s really no surprise that banks did away with promotional interest rates for a while there. Both of these are still major issues still affecting the economy. In fact, it was just announced today that nationwide unemployment has now hit 10.2%. With so many people scraping by to pay the bills, it’s understandable why the banks are way of offering 0% for 12 or 15 months. During the spring and summer, defaults on credit cards surged and some major creditors like Advanta even went under because of it.

That being said, overall the economy is improving. Yes, unemployment ma y creep a bit higher, but at least the banks become profitable again. This is why we are starting to see the 0% credit card deals pop up again. Some banks , like Discover, have even started offering a 12 month interest-free deal on one of their cards (the rest of theirs are still only for 6 months). As the financial tides turn, expect the banks to continue sweetening these interest rate deals.