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0% Credit Card Offers May Soon Disappear


by Kelli B. Grant
Wednesday, October 1, 2008
provided by Smartmoney.com

Believe it or not, the federal bailout is not the only thing on Congressional leaders' minds these days.

Over the past several months, lawmakers and the Federal Reserve have been moving toward new regulations targeting the credit card industry. Just last week, the U.S. House of Representatives overwhelmingly voted to pass the Credit Cardholders Bill of Rights, which was drafted to mirror regulations the Federal Reserve is planning to announce this fall.

The Fed rules, while binding for credit card issuers, are more easily undone than law -- hence the parallel proposals, explains Linda Sherry, a spokeswoman for Consumer Action, a consumer advocate. The Senate is not expected to review the bill until after any new Fed rules take effect January 1. It's extremely unlikely they could (or would) weaken the standing regulations, she says.

The regulations are tremendously good news for cardholders. Consumer advocates hail talk of eliminating predatory lending practices like retroactively applying interest rate hikes to balances, and implementing new requirements such as a 45-day notice before raising interest rates.

Not surprisingly, the credit card industry is balking at the proposed new rules. Among other things, card issuers note that because of the greater restrictions, they will no longer be able to afford to offer the enticing teaser rates used to lure customers in. "It could wipe out all these 0% financing offers overnight," says Curtis Arnold, founder of CardRatings.com.

It's already slim pickings. The number of mailed solicitations credit card issuers sent dropped 14% during the second quarter of 2008, according to market researcher Mintel Comperemedia. "They're going to focus more than ever on their profitable customers," says Scott Bilker, founder of DebtSmart.com.

While any new regulations on the credit card industry may cut promotional offers in the short-term, expect a bounce back -- or other good deals -- as companies get used to the rules. "There was a life before 0% financing offers, and there will be a life after," says Gerri Detweiler, credit advisor for Credit.com. "These companies want your business and they want to make money."

Still, now is a good time to lock in a 0% rate -- assuming you qualify. "If you have good credit, the doors are still open to you," says Bilker. Those with a less-than-stellar score may receive offers for shorter promotional periods, or less favorable ongoing rates.

Here are five card offers to consider:

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