Average Credit Cards with Great Rates

Nowadays balance transfer credit cards have become more popular as way for consumers to lower rates and payments on their debts. Mortgages are harder to qualify for and home equity lines are reserved for elite borrowers with tons of equity.  Without the mortgage crutch, consumers are held hostage to the higher rates and payments that credit cards offered them in the past in exchange for their convenience. Balance transfer credit card issuers are attracting new customers in droves by offering lower rates and payments for an introductory period on balance transfers.

As with anything, the devil is in the details. Chances are, the credit card you want to transfer your balance to isn’t any better than the one you already have after the introductory period expires.  So why do we still make the transfer? It’s usually because we have made up our mind that we are going to pay off, or pay down the balance we have during the introductory period. Or, we simply need the payment break, however. Just as in Vegas, the house knows the odds, and odds are that you won’t pay your balance down or off. This brings us back to square one, or worse.

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How often have you seen the advertisement online or in your mailbox telling you how you should apply for their credit card to repair your credit? The advertisements are right to some extent; credit cards can help you when you are trying to repair your credit, if used correctly. The problem is that most people try to repair their credit with horrible credit cards while using the same spending habits that caused their bad credit to begin with.

A large majority of the people who set out to repair their credit, with the aid of a credit card, do so with the wrong credit cards. There is a right way, and a wrong way to repair your credit and using a credit card is only one small part of the process. At Direct Banc, we monitor the applications and approvals of credit cards across the web that are designed and marketed for those seeking to repair their credit. The overwhelming majority of the cards that people are applying for are going to hurt their credit, not help it.

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In today’s market banks and mortgage lenders are being extremely cautious about which loans they approve. Real estate values are dropping and foreclosure rates are rising, and many banks are dropping out of the mortgage business all together. Gone are the days when banks could sell their loans on Wall Street, reload, and do it again. Banks are now faced with the reality of having to actually hold on to their loans like they did in good ole days. This means that they want to make sure that the loans they make at this time are good loans that will pay them back on time.

Nowadays, it seems like all we ever hear about, in reference to mortgage brokers, are the bad brokers; the ones that make headline news and are carted away on TV in handcuffs. What these stories fail to report, is that the bad mortgage brokers make up less than 1% of all the brokers that are licensed in America. In fact, it has always has been the mortgage brokers that have advocated for tougher licensing guidelines, not the banks. They have always argued that by tightening licensing guideline they can eliminate the ‘bad brokers” that give legitimate brokers a bad reputation.

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The Credit Cardholder’s Bill of Rights Act recently cleared the House Financial Services Committee last week and is garnering support from both sides of the aisle. This bill is designed to protect consumers from “unfair and deceptive” practices that the credit card issuers are engaging in like, universal default, two cycle billing and raising rates on existing balances, even for who pay on-time. The usual quid pro quo for the banking industry is to take heed of the saber rattling from Washington and “self regulate” before congress or the Fed has to step in.

The Fed addressed this issue in May basically agreeing that some credit card practices were unfair and need to be addressed. In that time, the card issuers have done very little to correct this situation other than making their warning labels more prominent. Some theorize that this is because credit card issuers are reeling from mortgage right-downs and are unable, or unwilling, to take the one-two punch. There is little doubt that by making these changes the credit card issuers will lose money; the latest independent study estimates 10 billion industry-wide.

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