Preparing For Rough Times Ahead

The global credit crunch that began last year and has caused misery in financial markets around the world is not over. In fact, many economists believe that we haven't even reached the beginning of the end. That spells trouble for many consumers and business owners looking for credit these days -- and possibly for the rest of 2008.

Banks are cutting back, even on accounts held by their most credit worthy customers. Credit lines are being reduced, and interest rates are being raised, even for certain borrowers who've never been late with a payment. The excuses the banks are using these days include, "You aren't paying down your credit card balance down fast enough," and, "Your debt to credit limit ration is too high." Banks are even looking at the what consumers are buying when determining whether or not the consumer is going to be hit with an unfavorable change in terms. In other words, your credit card company may change the terms and conditions on your credit card account simply because it doesn't like what you are buying!

I have about $4,000 worth of business-related credit card debt on one business credit card; it's an account with which I'm still riding out a introductory zero APR period, so I'm not getting slammed with interest charges. I'm worried about the state of the U.S. economy and the state of my business. Business has been slow, and I'm thinking that I may have to tap into more credit lines to keep things going. I receive a lot of snail-mail credit card offers each and every week, and many of these offers are for business credit cards. I usually glance through these offers quickly then dump them into the shredder. Lately, however, I've been paying very close attention to these offers, since I just might open up one or two more credit accounts.

I'd like to transfer the $4,000 balance on my current business credit card to a new card with a 0% balance transfer offer, so that I can continue to finance my operations without paying any interest. However, lately, the deals I've been getting via snail mail haven't been that great, and I'm certain the reason these recent offers have been lousy is due to the weak economy in cahoots with the credit crunch. This is very disappointing to me, because, historically, those snail mail credit card offers included the most consumer-friendly credit terms and conditions. It was not too long ago that I was seeing offers of 0% intro APR on transferred balances for 15, with no balance transfer fee. Here's what I've been seeing lately:

• A business credit card offer from Bank of America - 0% intro APR on transferred balances and balance transfer convenience checks until December 31, 2008, with a balance transfer fee of 3% (minimum transfer fee is $10.) Once the interest-free period ends, the APR converts to the standard purchase APR on this particular account, which is fine. But here's the kicker: the balance transfer fee "will post to your account as a cash advance fee and will receive the Standard cash advance rate." So, in other words, if I transfer $4,000, I'll be charged a balance transfer fee of $120, and that $120 will be treated as a cash advance. You probably already know this but cash advance fees are always very, very high. For this particular card it's a minimum of 19.99%. This offer was shredded real fast.
  
  
• Snail mail business credit card offer from Washington Mutual Bank (WaMu) - 0% intro APR on transferred balances until August 1, 2009 -- that's 13 months! The balance transfer fee is 3% of each transferred balance, with a minimum transfer fee of $5. The "go to" APR -- the APR the remaining transferred balance would be subject to once the interest-free period ends -- would be the Standard purchase APR, which happens to be a reasonable and competitive 9.99%. And, once again, here's the ugly part: "Balance transfer fees are added to the purchase balance and are subject to the APR for purchases." OK, granted, this is better than the Bank of American offer I described above where the balance transfer fee is treated as a cash advance, but I'm still not buying it. My credit rating is very high and I see no reason why I should have to pay finance charges on a balance transfer fee, like I'm some sort of subprime borrower. If the offer is stellar, then I don't mind paying a balance transfer fee, as long as the fee is a one-time, flat fee with no finance charges attached.
  

I'm not interested in transferring my business card balance to a consumer card, even though I'm very confident that I could find a better deal than the recent business credit card offers I've seen. I've worked very hard to get my FICO® credit score above 800, and transferring thousands of dollars to a new or existing consumer credit card would bring my score down.

That's all I have to report from the wonderful yet perilous world of credit card balance transfers for now. Stay tuned!

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No Balance Transfer Fee Credit Cards Still Obtainable Despite Credit Crunch

The credit crunch that's been causing problems in American credit markets has been affecting all classes of Americans, from billionaire Wall Street insiders trying to finance huge corporate takeover deals to middle-class consumers looking for attractive deals on loans and credit cards. With the housing market still languishing and many seasoned economists declaring that the American economy is already in a recession, it seems that 2008 is not going to be a good year for many Americans, from a money and finance perspective. The Federal Reserve has been responding to turmoil in domestic financial markets and the slumping economy by cutting short-term interest rates, but there is no way to tell when or if these Fed actions will jumpstart the economy. Slowly but progressively, banks have been approving fewer and fewer credit card applications since the subprime debacle began at the end of last summer. Thankfully, however, applicants with strong credit profiles can still get approved for high quality credit products. Moreover, in the American market today, financially secure individuals can still find 0% introductory annual percentage rate (APR) balance transfer credit cards that don't charge a balance transfer fee, even with certain small business credit cards.

On the consumer side, feeless, 0% balance transfer deals are still being offered by some of America's most reputable financial institutions, including the Bank of America® (BofA), American Express® and the Pulaski Bank & Trust Company. Web surfers looking for business credit cards which combine 0% intro APR on transferred balances with no balance transfer fee can choose from a healthy selection on offer from Citi®. According to Steve Brown, content manager at BusinessCreditCards.cc and BalanceTransfer.cc, the most popular consumer card at BalanceTransfer.cc is the BofA Platinum Plus® Visa® Card, while the most popular business credit card at BusinessCreditCards.cc is the Capital One Business Platinum Card.

"We've been getting emails from consumers who have been writing us about manifestations of the liquidity crunch that have been causing considerable pain for both American banks and individuals trying to find favorable credit deals. Cardholders have been complaining most about seemingly random credit line decreases, ever for customers with perfect or near-perfect credit. A cardholder who has an excellent credit history but who also has a high debt-to-credit ratio may be targeted by their bank for a credit limit decrease or an interest rate increase, since banks are worried about consumers who may be relying too heavily on revolving credit. It's never a good idea to have a high balance on a credit card. Consumers should use credit cards to take advantage of rewards programs and zero APR offers, and for emergencies. The consumer who tends to carry a balance from month to month may be headed from trouble in this economy," said Brown.

"The only positive consequence of this sagging economy is that the Fed has been responding to it by lowering short-term interest rates. These moves by the Federal Reserve have made obtaining and paying off loans and credit cards easier," Brown added.

Since mid-September of 2007, the U.S. Prime Rate has been lowered from 8.25% to the current 5.25%, thanks to interest-rate cuts by the U.S. Federal Reserve. Since most variable-rate credit cards -- and many other types of loans -- are indexed to Prime, most consumers and business owners who have been making payments on these loans and credit cards have been enjoying reduced APR's. Any consumer with a variable-rate credit card indexed to Prime who hasn't seen a decrease in their APR over the last 6 months should contact their bank and ask for a lower rate, Brown advises.

Some credit cards and loans are indexed to the London Interbank Offered Rate (LIBOR). Since LIBOR tracks very closely with America's benchmark, short-term interest rate -- the Fed Funds Target Rate -- individuals and business owners with loans or credit cards indexed to LIBOR should be enjoying lower payments as well.

The Federal Reserve is expected to cut short-term rates again when the Federal Open Market Committee (FOMC) meets for its next monetary policy meeting on April 30, 2008.

0% intro APR credit card offers are ever-evolving. Brown urges consumers to visit the blogs at the BusinessCreditCards.cc and BalanceTransfer.cc websites to stay informed about the latest news and tips from the credit card industry and to read reviews of newly released credit cards. Brown welcomes any and all questions and comments, which can be emailed from either site's email form.

"The banks make a lot of money with credit cards, so they still want to fill consumers' wallets with their plastic despite ongoing troubles in the credit markets. Individuals who are interested in getting the best possible deal with a consumer card, business card or any other type of loan should be sure to keep their credit score high, pay all their bills on time and try to keep their debt-to-credit ratio at around 30%. Consumers who plan on spending money on a major purchase should try their best to pay cash. If an all-cash payment isn't possible, consumers should apply as much cash as possible to the purchase, and put the rest on a credit card that has a high credit limit, a zero or low APR and a generous rewards program," Brown concluded.

Source

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Import News About The Bank Of America Money Return® Visa® Platinum Plus® Credit Card

The terms and conditions of the Bank Of America Money Return® Visa® Platinum Plus® credit card have been modified; this card now charges a fee for any type of balance transfer: 3% of each transfer, with a minimum charge of $10.

The good news: Bank of America (BofA) still has 5 (five) credit cards to which you can transfer your non-BofA credit card balances at 0% intro APR, and pay no transaction fee on introductory balance transfers. On our feeless balance transfer page, you will also find cards from American Express and Pulaski Bank (you should only consider applying for a Pulaski Bank credit card if your credit history is spotless.)

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The Credit Crunch

The credit crunch that's enveloped global financial markets has many consumer and business owners worried about the availability of consumer-friendly financing options. The crunch has caused many lenders to cut back in different ways, but 0% credit card offers are still numerous and often generous. Some consumers have complained of out-of-the-blue credit line decreases, but, from my own anecdotal observations, these situations appear to be few and far between. Keep your credit score high and your balances low and you shouldn't have to worry about sudden and inconvenient limitations on your credit. I'm still getting lots of great, unsolicited 0% offers in the mail, from accounts I already have open as well as offers to open new accounts. When these offers start drying up, I'll start to worry.

The Federal Reserve has been cutting short-term rates since mid-September of last year in an effort to ward of recession and help cure problems in the financial markets. Some Fed rate cuts have been very aggressive, and the central bank will likely cut rates again on March 18. These interest-rate decreases will get consumers and businesses into borrow-and-spend mode, and will also grease the wheels of the banking system and make it easier for Americans to find consumer-friendly loans and credit products.

When the Fed cuts short-term rates, the U.S. Prime Rate is one of the key rates that's lowered by extension. Since most variable-rate credit cards are indexed to Prime, this means for most people, the interest rate on their credit card debt is now -- or will be soon -- 2.25 percentage points lower than it was last summer. With the Fed likely to cut again in March, consumers who carry balances from month to month will end up keeping more of their hard-earned money, which is always a good thing.

Some credit card companies don't want to lower their rates when the Fed lowers the U.S. Prime Rate. Since these companies can't control the Prime Rate, whenever the Federal Reserve cuts the U.S. Prime Rate, these banks will counter by raising the margin that they add to Prime (if you have a variable-rate credit card then, most likely, your APR = U.S. Prime Rate + A Margin.) It's perfectly legal for them to do this (gotta' read those terms and conditions carefully) but, understandably, most consumers find this tactic underhanded. If the Fed is in a rate-cutting cycle, and you find that the APR on your credit card isn't declining steadily in sync with Fed actions, then call your credit card company and ask for an explanation. If you don't like what they have to say about it, then you may want to consider transferring your credit card balance to new a credit card at a new bank.

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Bottom line: if you've experienced some manifestation of the credit crunch, don't worry: the pain is almost over.

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Important News Regarding The Citi® Home Rebate® Platinum Select MasterCard®

If you're looking for a 0% balance transfer credit card, and you don't want to pay a transaction fee for transferring credit card balances, then the good news is that there are still plenty available. The bad news, however, is that the Citi® Home Rebate® Platinum Select MasterCard®, while still available, now charges a balance transfer fee for all balance transfers. This news is significant because the Home Rebate card was the last 0% "no fee balance transfer" card that offered an interest-free period of 12 months; currently, the all other cards offering free, 0% balance transfer deals have an interest-free of no more than 6 months.

Now don't get the wrong idea. The Citi Home Rebate card is still an excellent credit product offering great value, and you can apply for this card right now if you want to. You can still transfer a balance at 0% intro APR for 12 months, but you'll be charged a balance transfer transaction fee: 3% of each balance transfer with a minimum fee of $5. This card has been the #1 ranked credit product (based on both applications and approvals) at this website since the fall of last year.

I like the Home Rebate card because it has a very attractive rewards program that helps cardholders pay down their mortgage balance faster and build home equity. The American housing market probably won't improve until late 2009, so, for many, any help with getting ahead can make a real difference.

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