Chances are you have been seeing a lot fewer of these offers these days – that is, if you see any at all.
On Tuesday’s Early Show, financial contributor Vera Gibbons described how credit card companies have been cutting back on offering consumers new lines of credit, because they are trying to avoid exposing themselves to further bad debt.
HSBC has reduced the number of pre-approved solicitations sent out this year by 54 percent, while Citibank has cut their offers by 45 percent, the news report states.
At first you may welcome a reduction in junk mail and all of the shredding it necessitates. However, for someone with so-so credit, a reduction in pre-approved offers may potentially be a bad thing.
It means that if you want to apply for a new credit card, you will have to look harder to find a lender who will approve you. And if you do find such a bank, their rates are not likely to be fantastic.
And the credit crunch is not the only thing that has been affecting the types of deals commonly offered by card companies.
Some financial experts have suggested that new regulations for the credit card industry, known as the Credit Cardholders Bill of Rights, could limit the number of 0 percent offers commonly used by lenders to attract new customers.
However, others insist that resourceful credit card companies will still find a way to lure in customers, even if they have to devise new types of incentives.
“There was life before 0 percent financing offers and there will be life after. These companies want your business and they want to make money,” consumer advocate Gerri Detweiler told SmartMoney.
Just remember – once you’ve got credit, use it wisely.
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