Over the past several months you may have noticed that the number of credit card offers peppering your mailbox has dropped. That is because credit card companies have tightened their lending restrictions and in some case are axing customers.

New Offers On The Way?

However, don’t be surprised if the number of offers begins to increase, something I’ve taken note of personally these past few weeks. With quite a few banks now taking federal taxpayer money, they’re in the mood to lend again, but they really haven’t eased up on their restrictions. This means that if you have very good credit, you should see additional offers. Not so with the credit challenged consumer.

5 Flags When Considering A New Credit Card

Not every credit card offer received is worth the paper that it is printed on. As a matter of fact, some offers are a sheer horror. With scores of offers out there, why would anyone choose anything less than the best plan? Let’s take a look at some of the credit card offers you’ll really want to avoid.

Annual Fee – With so many cards out there not charging an annual fee, why would anyone choose one that does? For business cards or consumer cards offering a lot of perks, a reasonable annual fee is okay. All the same, if you are being charged $50 annually for a card with a credit line of $500 or $1000 then you are being ripped off.

Application Fee – Paying an application fee is pathetic. The only cards requiring such a precondition are those for people with awful credit. If you have bad credit, the last thing you need is another credit card. Expect to pay a high interest rate for the “advantage” of shopping with one of these cards.

Low Interest Rate, Low Credit Line – If you are offered a low interest rate credit card what good is it if the credit line is too low? How very nice of them to offer to you a 2% opening APR, but with a credit line of $500 or less you’ll have a hard time making good use of the card.

Penalty APRs – Be on the look out for that credit card offer broadcasting a low rate. It could double or triple if you have just one late payment. Do you think that 3.9% is an appealing rate? You’ll quickly rethink that if your rate resets to 21.9% or more!

Bad Deal Convenience Checks – If you idled your credit card a few months ago, do not be surprised if you receive a heavier than normal envelope offering you “convenience checks” to pay off expenses. These checks are not just convenient, but costly. Be careful, you could be hit up with the cash advance rate to borrow money and/or get slapped with a fee to use each check. Stay with those deals where fees are not assessed and borrowing rates are reasonable; familiarize yourself with your user’s agreement.

For certain, most credit card offers are sufficient but you need to know what you are getting before agreeing to a card that just may not be advantageous to you. Consider obtaining copies of your credit report too before applying for a new card.

Tags: annual fee, annual percentage rate, application fee, consumer credit, convenience checks, Credit Cards, credit line, credit report, credit score