January 05, 2009
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News: What's Coming in 2009 for CC Holders?
Are we moving into a new era of positive hope, as so many New Years resolutionists want to believe? To answer that question, perhaps we should examine the projected realities and assess the prospect of what can be done. Liquidity will, undoubtedly play a key role which will depend more than ever on using credit cards responsibly to get past the jammed-up gears of consumer confidence and job loss. The job market will continue to deteriorate until our nation can reach a point of positive confidence, both for the consumer and for the supplier. Without the responsible use of credit cards, prospects would be bleak indeed. So, here is a related series of fundamental credit card concerns to shed light on upcoming credit card industry predictions.
One key issue involves future credit card availability. One universal agreement is that the easy access to cheap and unqualified credit cards has gone away. Although a big change, this is not unhealthy. Our nation is in desperate need (and has been for some time) of creating a new breed of consumers who are financially savvy. A population that aligns itself with the necessity of living within its means. So the new arena that is forming will exact new standards which will force consumers to responsibly develop sound financial habits. No more of Bush's ‘just go shopping' advice.
Through it all, we will see mean credit scores fall and, at the same time, the qualification bar will be raised. The former ‘good' credit card rating (FICO Score) has already been raised from 650 to 700. FICO (Fair Isaac's). FICO Scores range from 300 to 850 (low to high).
Those who bail out on credit card loans may get some immediate financial relief but will also experience an 70- to 130-point reduction in their scores. They will find it more difficult to qualify for further credit card offers until they spend some time shoring up their risk-level again. This can take some time.