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.

Credit Card Changes Are Coming (But Not Until 2010)

We are a little over half-way through the first month of the New Year, which I can't believe. New years usually bring resolutions on how people are going to change their lives this year. By now, people have usually forgotten what their resolution is and they have returned to their old ways. When it comes to your credit card spending, I suggest you keep your resolution this year because there are changes coming.

The Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration have set new credit card issuer regulations that prohibit what they deem "unfair acts." While these regulations don't take effect until July of 2010, now is your chance to get your credit card "situations" under control. Consider it practice for when it'll really benefit you--and your credit.

New regulations

• Prohibits lenders from raising the interest rate on your credit balances, unless you make a payment late. Translates to: make your payments on time!


• Credit card issuers cannot charge a late fee, if the credit card statement is not sent within a reasonable amount of time (must be received by the borower about 21 days prior to the due date)--allowing the borrower to make the payment on time. Translates to: make your payments on time!


• Restricts the way that lenders can apply payments. They can't apply payments to your account in a way that would cause the balance to earn a higher interest rate. Translates to: make your payments on time!

What you can do to take control of your credit

• Sign-up for bill pay. Most banks offer free bill pay with your checking account. You can schedule your bill to be paid on whatever date you want, so sit down and schedule the payment to be paid on or before your credit card due date. This way, the credit issuer won't be able to raise your interest rate because you absent-mindedly forgot to make a payment one month.


• Set-up automatic payments. You can also provide the card issuer with permission to deduct the minimum payment (or another payment amount) from your checking account each month. Since it puts the onus on the credit issuer to withdraw the payment for you, there is little chance it'll get paid late. And if it does, it's their fault. Don't feel comfortable with this. There's still another option. Most credit card companies allow you to schedule future payments on their own website.


• Only charge what you can afford to pay. The absolute best way to get your spending and credit card debt under control is to only charge an amount you can afford to pay off the following month when the bill comes. No balance means no issues.

You shouldn't need an excuse to get your credit under control, but government regulations are coming that you give the opportunity you may need to do just that.