0% offers are becoming more readily available…
Applications and preapprovals for 0% APR offers on new purchases and balance transfers are once again filling consumer’s mailboxes. And the number 0% APR credit cards being marketed on the Internet is on the rise. Hard to come by during the recent credit crisis, 0% rates for as long as 21 months are resurging for responsible consumers with credit scores of 720 and higher.
As delinquency rates continue to drop, down 26% from a year ago, credit card solicitations that feature low introductory APRs are up more than 18% to 71% of offers sent through the mail. Balance transfer offers are up, as well, to 65% compared to 54% a year ago. On the Internet, companies such as Chase, Citi and Capital One have revamped their marketing campaigns to include many new 0% APR deals.
During the recent downturn, card companies shunned many responsible consumers because their borrowing habits meant small profits. But prime borrowers are being targeted in hopes that they will carry a balance beyond the introductory period and boost profits for lenders. In addition, rates after the promotional period are running higher, on average at 15%.
Balance transfer promotions
The terms for balance transfers have also seen changes. Promotions may be for a longer time but the fees are higher, typically between 3-5%. Many credit card issuers have also eliminated caps for fees on balance transfers, many of which were $100 or less only a year or two ago.
But the advantages of a 0% transfer can’t be disputed, as long as the balance is paid off before the promotional period ends. With an interest rate of 18%, the savings would be upwards of $500 for a balance of $5,000 on a 0% APR credit card.
Be sure to see our complete list of credit card offers >