Earlier this month, USA Today reported on the rise in 0 interest credit card offers being extended to consumers. Anyone that's been tracking the interest-free credit card market knows that 0 interest introductory offers aren't new, but they are a lot better than they were two or even three years ago.
Why? Well the economy's slow rebound certainly has a lot to do with it, and as USA Today explains, better credit card offers point to the improved confidence of lenders.
And why shouldn't they be confident? The last handful of business quarters have reported a decline in credit card delinquency, though unfortunately no decline in overall credit card debt. The unemployment rate is down nationwide, and overall job growth is slow but more-or-less steady.
But is the extension of 0 percent credit card offers to more consumers all good news? That remains to be seen.
Clearly, there's a greater sense of vulnerability when it comes to consumer finances after the Great Recession. Consumers might be less likely to run up a credit card tab knowing now the havoc it can wreak on their credit score and, ultimately, their bank accounts. And yet, credit card debt in quarter 4 of 2012 was up compared to the previous year, with quarter 1 statistics still awaiting.
Essentially, the average consumer in 2013 is paying their bills on time, but they're having a real tough time paying down debt. 0% credit card offers applied to balance transfers can help alleviate that debt by eliminating interest, which means that in a perfect world higher approval rates for such cards could help the average consumer pay down their debt.
Unfortunately, the world isn't perfect, emergencies happen, mistakes are made and credit card debt either remains steady or builds even more if left alone. But the fact that these 0 interest offers do exist to take some of the weight off of consumers is certainly helpful, and like USA Today explains ultimately shows creditors' improved confidence in the overall economy.
And who knows - maybe that could mean even longer interest-free introductory periods. (Two years, anyone?)
