The Right Way to Shop for a Credit Card in the Crisis

One of the key characteristics of the credit crisis is that credit card shopping has gotten harder. Not only have the minimum credit score requirements gone up, but some credit card issuers have stopped offering some of their most attractive perks, like credit card rewards. Indeed, finding a credit card in this economic landscape is different from the times when credit was flowing freely.

Know your credit score

There was a time when you simply needed to have a credit score higher than 620 to get a credit card with a competitive interest rate. But that’s not the case anymore. Now, credit card issuers are scrutinizing credit card applicants with credit scores lower than 720. That’s not to say you won’t get a credit card if your credit score is 680 or 700, but you might not get the best interest rate. Anything you can do to improve your credit score before applying will help you chances at getting a better rate.

It’s not just about you

As credit card default rates increase, credit card issuers look deeper to identify factors that could predict a charge-off. Things like where you work, where you live, and where you shop could affect your ability to get a credit card. If you live in an area where there is high unemployment, you may have a more difficult time getting a credit card. That’s because higher charge-off rates have been linked to high unemployment.

The card you sign up for won’t always be the same

Credit card terms continue to change. Even cardholders with good credit scores are seeing their interest rates increase and their credit limits slashed. Bait-and-switch games are prevalent right now. Chase Bank was recently sued for adding a monthly fee and increasing the minimum payment on credit cards when the original terms didn’t include those conditions. The bank did agree to stop the finance charges, but only after being sued.

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Keep in mind that credit card issuers typically have the ability to change your credit card terms at any time, for any reason. When new credit card rules take effect in July 2010, card issuers won’t be able to take advantage of consumers the same way. But for now, what they say pretty much goes.

Where to find the best offers

Shopping around for a credit card is even more important than ever to ensure you’re getting a good deal. But, it’s a good idea to thoroughly review credit card offers before applying for them. Since credit card inquiries hurt your credit score and card issuers are stricter with credit score requirements, you want to keep your credit card applications at a minimum.

Start looking at the bank where you currently hold a checking or savings account. If you have a good balance and few to no overdrafts in the past, you may qualify for a credit card with your bank. You can also review offers that come to you in the mail (making sure to read the fine print before signing up for them), or visit a site like to compare different cards that you may qualify for.

And remember, when you do get your credit card, make sure you use it correctly. Keep a low balance and pay your bill on time to reduce the risk of having your rate increased or credit limit cut. These actions have the dual benefit of helping to improve your credit score.

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