Posted byon October 28, 2008
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During a recent interview, I was asked if the credit crisis has had any affect on our credit card arbitrage. I hadn’t even thought about it because so far, it hasn’t.
Of course that could always change with one trip to the mailbox! I thought about many of the different angles that I have dealt with credit card companies in the last few months. Here are some of my observations.
Applying for new cards. I just turned over all my cards this summer to new offers without any problems. I’m getting ready to turn over all of Scott’s cards next month, so I’ll keep you posted.
Reallocation. When I got my new TrueEarnings Costco Business Card from American Express, I asked if I could reallocate some of the balance from my SimplyCash® Business Card from American Express which has a credit limit over $75,000. Their response was that I would need to wait 60 days before doing so. I thought that was interesting and something I haven’t heard before.
Cutting lines. There’s a very interesting thread that I’ve been following at Fatwallet where American Express is reducing credit lines. We haven’t gotten a letter yet, but I wouldn’t be worried if we did. I don’t carry any balances there, so it wouldn’t affect me. Now, if Chase or Bank of America cut a credit line where I’ve carefully placed a 49% balance I would not be too pleased.
Balance transfer fees. I’ve been monitoring the credit cards with 0% balance transfer offers, and they are still out there. I did get an email that Discover will be removing the maximum balance transfer fee on November 1 for their cards (so you could probably still lock in a maximum fee if you applied this week). I’ll be watching to see if other cards follow suit.
Freezing HELOCs. Back in May, a reader that had his HELOC frozen asked if I was worried about the same. There’s a reason that I have our home equity line of credit at a credit union; I believe that they have tighter lending guidelines and don’t feel as much pressure during a “credit crunch”… although I could be wrong! Either way, I’ve decided to max out our line, just in case. It’s below 3.5% on a tax adjusted basis, so I don’t have a problem paying a few dollars in “insurance” to keep it open right now. Once we turn over all our cards, I’ll drop it back down.
Credit Reports. Last time I checked our credit reports with the free FICO scores & credit reports offer, I didn’t see anything out of the ordinary. I usually scan the section where current lenders check to see if anything has changed on your report. They didn’t appear to be checking on a more regular basis. I’ll be interested to see if it looks different now (Note to self: time to find another free offer for credit reports!)
Interest Rates. I ignore them. Completely. All the time. We don’t carry a balance on any of our routine spending, so I couldn’t really care less what they would charge if we did. For all I know all of my cards could have had the interest rate raised, but I wouldn’t even know.
Have you seen any effects of the so-called “credit crisis” on your stash of credit cards?