Like most people, I have more than one credit card. In fact, I have about six credit cards, although I don’t charge on all of them. I might have canceled several of them in the past year, but I was told by a loan officer at my bank that all those unused credit cards make you look better to a lender. Somehow, they represent all the untapped borrowing power you have. It seemed like a strange idea to me, but the whole personal credit thing is a mystery, so I just went along with it. Now, it’s very possible that the banks will cancel some of those unused credit cards of mine, which won’t look good to prospective lenders either. However, since I’m not looking to borrow any money right now (or in the foreseeable future), maybe that doesn’t matter.
What I do have that matters to me, are two credit cards, one that is my “everyday” card, that I use to charge things and strive to pay off in full at the end of each month. The other is a 0% balance card, on which I have a balance that I am paying off in installments. That 0% rate is good until March 2009. Unless some unexpected expense comes along, I will have paid off my balance before March 2009, but unexpected expenses do arise. Last month I had to buy a new laptop. That’s over $900 on my everyday credit card that will have to be paid off when the credit card bill comes. That’s $900+ that could have been applied to the 0% balance card, but now is spoken for. So, given the bad economic times, I find myself asking, suppose I went looking for another 0% balance credit card offer when March 2009 approaches. Will I find one, or will those offers have disappeared?
Although we all have credit cards, I'm not sure that we all understand how credit cards work. I know that I am one of the people that the credit card companies regard as a "deadbeat," because most of the time I pay off my balance in full each month. This is good for me, but the company doesn't make money, so I am not numbered among their favorite customers. Considering how many credit card offers we receive, and how often we are solicited on TV and in print to buy things on credit, it can be easy to lose track of the fact that this is business, not charity. If anyone needed proof of that, the change in the bankruptcy law that made credit card debt harder to discharge ought to be sufficient. The credit cards companies are happy to lure a customer into overspending, but they don't want that debt to disappear in a bankruptcy.
Right now, the media are full of suggestions about how to reduce the load of credit card debt burdening the individual consumer. It's pretty hard to argue with the logic of reducing one's debt load, especially at a time when money is becoming incresingly tight. But what will consumers do if they do need credit? One obvious point is that you need to have established good credit. Another is to keep an eye on your credit limits, which may have been reduced without prior notification. This is more likely to occur if the consumer has made late payments. Of course, missing payments in the current financial climate is an invitation to disaster.
None of this speaks to the question I raised earlier: Will 0% APR balance transfer credit card offers disappear? I just did a Google search, and such offers are still being made at the present time. However, I suspect that these cards will not be issued to just anyone. I have noticed that TV ads for cars that offer the inducement of low-percentage auto loans now qualify this offer with the words, "to well qualified buyers." Given my current financial state, I probably qualify as a well-qualified seeker of a 0% credit card, but I still wonder if these offers will survive into the next year. We'll just have to see.
