Recent Changes in Card Programs

Let us discuss some of the recent changes that card issuers have introduced in the programs they offer to credit consumers.

• Low interest balance transfers are back! To encourage consumers to ditch their cards and switch to the new ones they are offering, card issuers decided to bring back 0% balance transfers. With this reinstated feature, credit cardholders can transfer their existing balance from their old account to a new one that imposes a lower rate of interest. However, there is a catch: cardholders will be required to shell out much cash on balance transfer charges. For example, a consumer will be asked to pay as much as 7 to 10% of the amount he/she intends to transfer from one card account to another. It is also worth mentioning that this reinstated feature is only offered to consumers with excellent credit scores. In fact, only those who have credit scores of 720 and above get to enjoy 0% on their balance transfer transactions.

• More stringent screening for credit card applicants. There was once a time when credit checks only involve the manner by which a consumer handles his personal finances and credit accounts. But, today, card issuers are planning to consider the other aspects of the lives of their prospective cardholders. For example, some card companies are planning to require their borrowers to submit paperworks that will help demonstrate how they manage their utility and phone bills, and even their rent. If such plans get implemented, for sure it will be more difficult to get approved for unsecured credit cards and for multi-purpose loans.

• More fees. A lot of card issuers these days are planning to introduce new fees on the card programs they offer to consumers. There are reports about the plans of credit organizations to charge dormancy fees on consumers who failed to use their plastic cards within a period of three to six months. There are even plans to raise the fees charged for irresponsible credit card management. If such plans get enacted, for sure, consumers will find it very disadvantageous to use credit cards.