June 12,2009
-
Brave New Credit Card World, Pt.4
What else ya got for me?Nothing to sneeze about:
Annual fees: They're already coming back. In recent years, about the only main-line credit card lender still charging these were with American Express. The reason's simple. Amex offers better service and better perks. You pay more but you get more. Overall, less than %20 of the credit card issuers overall were charging these. Now annual credit card membership fees are being re-instituted but, without any added benefit.
Credit availability: Credit card consumers with less-then-stellar credit are heading for a dry season. Credit card offers in the mail have, all but, gone away. The internet still bustles with great offers but alas, we're only finding virtual good deals. You can't really get them "...cause they're only in a magazine". If you care to put your cash up front though, you can still get secured credit cards. What's the point?
The raw outlook: Meredith Whitney, analyst for Oppenheimer & Co, has been forecasting it all along. If Sen. Dodd's bill passes, the credit card industry plans to cutback consumer credit availability next year by, as much as $2 trillion. Could be trouble ahead.
What to do about it:
Credit card score: Do everything you can to improve your credit score. There's still a little room at the top. Try to be among those few ‘lucky ones'.
Get out of debt: Do this as soon as you can. Those stuck hopelessly in debt are sitting targets. It's only a matter of time. You must survive the onslaught the credit card industry warns is coming.
Hold on: hold onto whatever credit cards you have now. They're valuable, even if you rarely use them. New FICO rules favor them very highly if they're old and still in 'good standing'. Use them once ever six months just to keep them alive. Otherwise the card lender will probably close the accounts on you for being 'inactive'. It's a good thing now to have many old credit cards.