In the current economic conditions, many people have encountered financial situations that have affected their credit negatively. Credit repair and credit improvements are possible for most people and it is also important to try to reestablish good credit with new lines of credit, either a credit card or personal loan of some sort.
Right now the credit card companies are still making offers of low or even a zero percent introductory rate to get people to apply for their cards. However, before the credit crisis the introductory rate would typically last for 12 to 18 months. Now the introductory rate period is becoming shorter and shorter. The average time for the introductory rate is now only 6 months.
After the intro period the rate will readjust to the higher rate. Not only that but the majority of credit cards being offered now are adjustable rates tied to an index. This means that the interest rate is changeable based upon the movement in the index. With historically low interest rates available right now that is not a problem but if inflation takes over and interest rates rise, many more people may have difficulty keeping up with the rising interest rates on their credit cards.
If you are carrying a high balance when the introductory period is over and the higher interest rates kick in, you could end up paying substantially more than you may have realized.
While getting new credit cards and lines of credit is important for establishing new and improved credit, it is very important to be wary and to treat any new credit with caution. It is important to review your entire financial situation and only get the credit card if you have the ability to always pay cash and you don?t really need a credit card.
Yes, that sound completely counterintuitive and it is. But if you need a credit card to establish good credit you need to make sure that you are building good credit. Therefore if you have the cash available you can always be sure to be able to make the payments on time and you will be able to avoid credit problems in the future. If you get a new credit card and start missing payments because your financial situation can?t handle you are completely defeating your purpose in getting a card in the first place.