Where Have the Zero Percent Credit Cards Gone?

In an ever changing credit environment, you're hard pressed to find a credit card company offering zero percent options. These offers haven't hit the endangered species or extinct list, but they are harder to come by. And even those who hold credit cards with favorable terms are seeing their credit card companies reduce their credit limits, raise interest rates, increase fees, and even close accounts that are idle.

New credit

New credit is still available, but it's harder to obtain. Obtaining a new credit card is coming down to one factor--your credit score. Those with scores over 700 are receiving the best deals and most favorable credit card terms. Those with scores below 700 are seeing higher interest rates and lower credit limits. Some aren't receiving approval at all.

How reduced credit limits and idle accounts can damage your credit score

The worst part about having a credit limit reduced is that it can affect your credit score. This is true of idle accounts that are closed by the credit card issuer as well. When your credit limit is reduced or an idle account is closed by the issuer, your debt-utilization ratio is affected. The debt-utilization ratio is the percentage of available revolving credit that you're using. As your credit limit is reduced, the debt-utilization ratio goes up, and higher debt-utilization ratios can decrease your credit score.

This can result in difficulty in obtaining new credit, and can create unfavorable interest rates and other terms for various types of credit and loans.

The solution: Make sure you use your credit cards at least twice a year. Then pay off the balance before the due date so you don't accrue interest. This'll help to keep your accounts from being closed for non-use, and ultimately help keep your credit score from plummeting.

So where have all the zero percent credit cards gone? There are some still floating around out there, but obtaining them is increasing in difficulty. Know what affects your credit score and make sure you do what you have to keep your credit score up--preferably above 700. With a good credit score, you'll see less of a change in your credit availability than those with scores below 700.