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Thursday, November 13, 2008

Things are changing it's time to compare your credit card again

By Jason Moore

Due to the credit crunch the credit industry is a little bit shaken. They don't like it one little bit. They truly are beginning to take some dramatic steps in order to ensure that they only have the best and most reliable customers. They are also using some quite cheeky methods to ensure that people can't get themselves and therefore their company in even more debt. However in the rubble of a building, flowers still grow and in this economic earthquake, who knows what may shake lose?

There is a well known Chinese curse that runs 'may you live in interesting times' and economically the current times, right here, right now, are very, very interesting. Drastic measures will be taken, but from this there could be some truly spectacular deals coming to the surface. It could be time to compare your credit card with others on the market because you may be in for a pleasant surprise. There are some great new deals appearing that have evolved purely because of, and in response to, the economic instability. It can be good to apply evolutionary theory to the market and ask, has or will a new type of card evolve?

There are signs that this may be the case - of course it could just be wishful thinking but you should remain optimistic. One of these is that balance transfer fees are in some instance being dropped. This is strange. Because people are getting worried about their financial situation, especially any debt they may have, banks are saying 'hey look at us, transfer your existing balance for free and pay it off for free'. There are two things going on here 1) people are stopping using and transferring their cards as much and the credit companies are losing out and 2) people want to pay off there cards and therefore find this deal attractive generally. It is odd because when introduced in 2004, transfer fees were designed to stop people from making serial transfers and getting away with the free pay offs.

One of these offers is the removal of transfer fees on 0% balance transfers. It is strange because these fees were only recently introduced in 2004 so as to stop people transferring balances again and again. In the current climate it seems like the lenders are now changing their minds, perhaps realising that to attract good customers for a short time, one that might possibly stay, is better than attracting no customers at all. If you have a strong credit rating and an existing balance that you are paying interest on this is definitely time to compare your credit card with this new offer.

Of course there is a flip side to all of this that must be mentioned, albeit briefly. Credit cards are becoming slightly more difficult to get approval for. Credit checks are becoming stricter. Also some companies have slashed their customer's credit limits and put up some of their charges, for example charges for usage abroad and cash machine usage. Basically the companies are scared; they are torn between making a profit by getting more customers and cutting their loses. They want all of the best customers and none of the weaker ones. It is possible that one company may become an ark for all of the strong credited whereas other companies crumble and get washed away.

So in summary: things are changing, this much is clear. It is in every paper on the planet and even books about it are appearing in the bookshops. Along with this change the economy is changing and part of this is the credit card industry. Due to these changes new card will, and are, being introduced that are more suitable for the times to encourage new custom. You should compare your credit card to these new species or you will be selected for financial extinction - a bit too far? Oh well you get the point!

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