Getting Credit Is Becoming Easier

June 14, 2012 | by Justin Warren | Bill Payments, Consumer Info, Credit Cards, Credit Score, Payments Industry, Personal Finance

Last year was rough. Consumers were feeling the pinch financially and cutting back on their spending, but this year is turning out much differently. Although the economy is not as vigorous as some would like to see it, it has recovered sufficiently enough that banks are trying to lure card users back.

What does this mean for you, the consumer?

In order to get the ball rolling, credit card issuers are making credit more available, even to those with less than a perfect credit score. The good news is that people who were shut off from getting credit during the recession, are being let in the door again.

Those applying for new cards may have it easier because of the lower default rates overall. Credit card default rates dropped so low in 2011 that they are now lower than before the recession.[1] This is the type of news banks like to hear, and so they are willing to assume more risk in the form of new customers.

To attract customers viewed as good risks, the card companies are offering attractive bonuses and perks. Some issuers are offering cash bonuses if you spend a certain amount within three months. For instance, a Chase Freedom Visa gives you $300 cash back if you spend $500 in three months.

Even better, Citi Forward Card not only gives you a reward for signing up: it offers 6,000 Thank You points for making $600 in purchases and signing up for paperless statements, plus 1,200 bonus points for paying your bill on time and staying under your credit limit.

Not only that, but if you purchase, stay under your credit limit and pay on time for three consecutive months, the Citi Forward Card offers a reduction in your annual percentage rate.[2] That’s an unbeatable offer anytime.

Airline cards are also getting into the act by offering even more bonus miles.

For example, American Express Gold Delta Sky Miles offers 30,000 bonus miles with $500 in purchases within three months. American Express Platinum Delta Sky Miles offers an initial 25,000 bonus miles, but you can earn 20,000 bonus miles with your first purchase and 5,000 bonus miles when you add two additional cards to your account. Delta Reserve Credit Card has similar ways to earn annual Miles Boosts.[3]

Before applying for any new credit card, you should review its terms and conditions, especially the interest rate, annual fee, late fee charges, and any other charges that apply. Only apply for the card if you really need it and like its terms, rather than just to take advantage of a free offer.

Also, remember that applying for new credit also changes your credit score.

If you’re looking to make a major purchase, such as a house or car, you don’t want your lender seeing that you’ve just applied for several new credit cards.

[1] http ://www .creditcards .org /article /good -news -obtaining -credit -card -may -be -easier -2012-.html