The hurly-burly credit card environment of 2009 has left an indelible imprint on the American consumer.
According to the consumer advocacy group CreditCardReform.Org, U.S. consumers owe $850 billion in revolving card debt. And RGE Monitor (home to noted economic gadfly Noriel Roubini) estimates that credit-card industry write-downs – accounting-speak for the losses absorbed by card carriers from defaulting customers, could reach $146 billion in 2009 (compared to $50 billion in 2008).
That has left card issuers squirming, and card customers scrambling for new cards. One carrier, Advanta (Stock Quote: ADVNA), the nation’s 14-largest credit card company, shut down its card business earlier in 2009 – leaving one million card customers in the lurch in an economy where credit is hard to come by. When a card company calls it quits, that means customers lose out across the board, with key issues like rewards points in limbo and automatic credit card bill payments in disarray.
If your card issuer closes its doors, where can you get a credit card fast? That’s a question that Advanta customers are certainly asking, and a question that BankingMyWay will try to answer. Here are some tips:
Know the odds – The first piece of the answer is not pretty, but new card-shoppers should know where they stand. The reality is that credit card companies are issuing fewer credit cards than they were last year. Equifax reports that banks have issued 9.8 million new cards through April 30, 2009 – down 38% from the same period in 2008. New card limits are down to an average of $4,594 – off 3% from 2008. Translation? A good credit score vastly increases the odds of getting a good card, and fast.
Stay in the family – SiliconValleyBlogger.com has a good idea – approach the bank where you have your savings and checking accounts and ask for a new credit card. Your bank already has your financial data in its system, and can consequently get you approved and a card in your hand faster than a bank that doesn’t know you.
Stay in the big leagues – While your bank can likely get you a new credit card within a week or so, you may opt to wait a while longer to get a better credit card deal. That means shopping at big card companies that can get you your card and a decent rate in a short period of time. BankingMyWay has a great list of low-interest credit card deals from major carriers. Plus, by applying online, your application will get processed faster and the damage done from a closed card may be minimized.
Don’t overdo the card applications – If you’ve lost your card, like Advanta’s customers, it’s only human to want to go out and apply for as many cards as possible, thus increasing the odds that they’ll get a new card without too many hassles. Big mistake. Multiple applications for credit cards will trigger multiple inquiries on your credit score – and that will likely drag your credit score down.
Check the fine print – Even though you’re in a rush to cover things like automatic online payments or card payments for upcoming business travel, make sure you review the fine print once you’ve been approved for a new card. Be especially vigilant about the card’s terms and conditions. Look for potential hidden fees and charges and get on the phone to the card issuer once you’ve found them. It may delay your card for a day or two, but the due diligence will save you a whole lot more trouble down the road.
With no guarantee that Advanta will be the only major card company to shutter its card operations, it’s a good idea to know how to get a credit card fast.
You just never know when you’ll have to switch from knowledge into execution.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.