Credit Card Mix

Many of us may be wondering why credit card issuers are raising rates and fees for their services in-spite of the fact that the Fed just dropped the rate to stunning 1 percent. How can it be explained today and what to expect in the future?

Changes in Credit Card Industry

It has been reported by numerous banks that just within the third quarter charge-off rates have risen to right above 5% of total credit card balances. And the situation will tend to worsen in the near future. To off-set the losses companies are trying to increase the rates on cash advances, as well as overdraft protection. Additionally some banks will introduce monthly service charges for those who have been carrying large balances for over 2 years.

When it comes to promotional deals, we are observing changes in offers with balance transfer options. Deals that offer a set low APR for the life of the balance will be hard to find. Instead intro period will be shorter and credit lines will be noticeably lower.

Credit card offers with rewards will undergo slight changes as well. For example AmEx has announced that it will eliminate one of their most popular reward program – Delta SkyMiles, which was earning double miles for its participants. Other banks will follow the example in order to survive current crisis by slicing “the fat” off their offers.

The Future of Credit Card Deals

By studying the patterns of cross-bank changes, we have got the feeling that a credit card with decent APR and balance transfer for about 12 month will be considered a good credit card deal in the near future.

One should probably stop concentrating on reward programs. He shall try to find a card with a high-enough credit line, since many issuers started tracking balances on other cards and lowering credit limits on many existing accounts. Watch out for new fees and charges that will appear in familiar credit card offers. What had been taken for granted for so many has become a feature that will define a good deal for some of us.

For current credit card deals visit credit card catalog at CreditCardMix.