The credit market has been tumultuous, to say the least, over the past few years. Consumers and small businesses looking to open new credit cards were finding approval rates low and opportunities scarce. Even those already wielding a credit card experienced account closures, interest rate increases and changes to the terms and conditions of the card. Times, however, may be changing. Consumers may find more favorable credit card offers showing up in their mailboxes, including offers for fee-free and interest-free balance transfers, below-average APRs and longer introductory rate durations.
Balance Transfer Fees
At one time, credit card issuers encouraged credit card holders to transfer balances from other credit cards. Typically, the encouragement came in the form of low balance transfer fees and a zero percent interest rate for a set period of time. Incentives started to wane as the credit market started to decline, and as banks saw costly new regulations for credit cards on the horizon, low-rate balance transfers were one of the first paces they looked to recoup lost fee revenue. But it seems as though balance transfers fees are heading back down as competition rises again.
Annual percentage rates were on a roller coaster ride during the troublesome credit times. The average APR in the third quarter of 2010 was 14.02%, which increased to 14.03% in the fourth quarter. As the new credit laws are setting in, 2011 is already seeing some lower APRs, and this trend is expected to continue throughout the year.
Longer Introductory Rate Periods
Many credit cards offer new customers or cardholders that transfer balances a low introductory rate for a limited time. A year ago, about 20 percent of balance transfer offers had a low introductory rate for 13 months or more; now about 58% do. The average introductory period lasts about six months, but many card issuers are now extending the period to one year or slightly more to 13 months.
As the economy and the credit market stabilize, they could bring good news to credit card holders. Credit card terms and conditions will become more favorable for the users. And those who are seeking new credit or more beneficial credit terms may only have to look in their mailbox to find them.