Getting a new credit card at the moment, during the infamous credit crunch, may seem like financial suicide but this isn?t really the case. There are many reasons why getting a credit card at the moment may actually be a good idea. In fact there are signs that the credit card industry is becoming more competitive, and more eager, to attract new customers and because of this many great deals are appearing. Although it may be more difficult to be accepted for a new card, once you have been they can in fact offer good value for money.
"I am not a number - I am a free man" shouted Patrick McGoohan in hit 60''s sci-fi 'The Prisoner' - unfortunately from a financial services point of view you are more of a number. Whether you like it or not your credit rating records every financial decision you have ever made - be it good or bad. It also records every repayment you have made and whether you have made it on time - or not. If you have a strong credit rating you will be most likely be accepted for new card. If you have a bad credit rating it is sensible to work on your rating, as applying and being declined can have an adverse affect. Also bear in mind that, at the moment, 20% less people are being accepted than in the past as lenders undergo a serious tightening up of their lending criteria.
The majority of those looking to change cards are doing so because they want to take advantage of 0% on balance transfer offers. In many cases this reduces monthly repayments and means that you can avoid paying interest on the amount you have borrowed, if only for a limited period. One way that card companies are attracting new customers currently is by making these 0% balance transfer offers more attractive. Some of the newest offers are highly competitive and, in some cases, even better than they were a few months ago.
The interest-free period on balance transfers varies from card to card. The smallest period is around 5 months and the longest is around 15 months. Most cards also charge a balance transfer fee of around 2.5% although, once again, this varies from card to card. If you look online you will be able to compare all of the cards available and see exactly what is on offer for yourself.
One very interesting recent change is that some card companies have scrapped their balance transfer fees. These fees were originally introduced to stop customers from hopping from card to card whenever they fancied. Most cards have a balance transfer fee of around 2.5% so if you transfer 2000 you will be charged 50. Now it seems that these fees are once again disappearing, although whether all of the card companies will follow suit, or not, has yet to be seen. Other card companies are scrapping fees such as cash withdrawal fees and foreign exchange fees.
If you are thinking of changing your credit card, perhaps to make savings on 0% balance transfer periods, it is wise to do so as soon as possible. As the credit crunch worsens it may become even more difficult to be accepted for new cards. There is no way of knowing how long the crunch will last or what will happen. Financial experts suggest that once you transfer a balance onto a new card you should focus on paying the balance off and not use the card for any other purpose. In reality this may be difficult as you may need to use the card in an emergency. However it is wise to try pay off the balance in full as soon as you can.