Credit Card Companies Giving Out Less Bargains

Credit Card Companies Giving Out Less Bargains

Looking at the credit card offers in the mail today, compared with those of ten years ago, there is quite a difference. The offers seem to be stingier than ever.

A perfect illustration of this is the lessening number of credit card mailers offering zero percent interest rates to their prospects. Ten years ago, if you had excellent credit, you could expect to see one or more zero percent credit card offers per month.

But, watching the mail in these times, even with the best credit rating, you are not likely to see these more than a couple of times in a year. And, even when you do see them, the time limit on the offer will probably be much less. Instead of the zero percent interest for twelve months, many are offering zero percent for six months. But, many card companies, in an effort to hold onto their profits, have simply ceased sending out zero percent offers at all.

But, there is also an additional indication that card corporations are getting much stingier with their offers. And that is the way they treat balance transfer fees. Many consumers, in an effort to same money, will switch balances from a credit card with high interest rates to one with lower rates.

When you transfer a credit card balance from one card company to another, you will typically be charged what is called a transfer fee. Usually this is in the realm of three percent. And that strategy has not changed much. But, what has changed is that there often is no maximum limit on the fee. Whereas, in the past, the maximum amount that they would charge you might be $50, $100, or whatever the policy was. Now, many times there is no maximum fee limit. So, every consumer should make sure that they read the fine print before initiating a transfer.

And, as is blindingly apparent to anyone who has been late on a credit card payment in the last few years, one dramatic change that the companies have made over the years is the great hikes in penalty fees that many corporations had implemented. Some companies had gone so far as tacking a $75 dollar penalty fee for being late on a payment.

Fortunately, in the past 21 months, the Federal Reserve has stepped up a bit to protect the consumer. They placed a limit of $25 on most credit card penalties. However, if a consumer has a 'pattern' of repeating certain penalties then it is possible for the rule to be waived.

There is no reason to feel bad for the credit card companies, however, as they are not exactly suffering. Because of the poor economy, many consumers have been forced to carry larger and larger balances on their credit cards. So, in a real perverse way, even with the number of defaults increasing, many companies are pulling in ever more money the more their customers suffer financially.

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