Is now the right time to get a new credit card?

 

April 11, 2008

A great many of us rely on credit cards both for day to day spending and to make one off purchases, and a recent report has shown that many Brits have five or more credit cards, and despite the credit crunch and turmoil in the financial markets they are continuing to spend on their credit cards. Of course, whilst frivolous spending and debt accumulation is not advisable credit cards can prove enormous ease, convenience, and flexibility to card holders, and you can enjoy a good choice of credit cards these days from a wide range of banks and car providers.

These days it is easy to make an application for a credit card, but that is not to say that it is easy to actually get a credit card. In fact some people wonder whether now is the right time to apply for a credit card, and this is for a number of reasons. Actually browsing, comparing, and applying for credit cards is relatively easy because you can use the Internet and look for credit cards from the comfort and privacy of your own home.

However, it is important to remember that the effects of the global credit crunch are still taking hold in the UK, and this is resulting in far tighter credit conditions, which in turn can make it far more difficult to get a credit card or other types of finance. With lenders being far more stringent about who they will lend to some people may find that now is not the best time to apply for a credit card, particularly in cases where their credit profile is not very good.

There are some other issues with credit cards at the moment, with a variety of problems that have recently been highlighted. Some of these include the withdrawal of credit card facilities by Internet lending giant, Egg, reflecting the increased stringency that lenders are using when it comes to credit card customers. Also, many credit card firms have been involved in a nationwide cull involving cutting the credit limits of customers to just £100 above their existing balance, which further reflects the increased stringency that lenders are applying when it comes to credit card customers.

Even those looking for a 0% balance transfer card could experience problems, as the number of card operators that now offer capped transfer fees has fallen, which could mean that borrowers end up paying a small fortune in order to transfer their balances from other, high interest credit cards. With all credit cards lenders are rejecting a higher number of applications, and have been for some months, so those that do decide to make an application may find that their application is rejected, which could impact on their credit.

Despite all of these problems, there are still some good deals available on credit cards, and those with good credit and low levels of outstanding debt may find that they are still able to get a suitable credit card. It is important that you continue to browse and compare credit cards before you make any commitment, and always check the eligibility criteria to ensure that the card is suited to your needs and circumstances.

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