Headline: Credit-card offers in full bloom

Source: Minneapolis-St. Paul Star Tribune, 19 May 2001 [excerpt]

URL: http://www0.mercurycenter.com/business/top/068196.htm

It's that time of year when credit-card companies fill consumer mailboxes with credit-card offer after credit-card offer. The spring blitz is called "the May marketing war," by Robert McKinley, chief executive of CardWeb.com, which tracks credit-card rates.

"For some reason, consumers tend to be in a mood to sign up for new credit-card offers in the spring," says McKinley.

Never mind that the typical household that uses plastic has six to 12 cards. More than 500 million cards are in use nationally, and U.S. credit-card debt more than doubled in the 1990s -- from $2,985 per household in 1990 to $8,123 in 2000.

[Actually, that’s 2.7 times, so it would be more accurate to say credit card debt almost *tripled*. --Andre]

The Federal Reserve's interest-rate cuts have led to lower rates on variable-rate cards and injected new life into a saturated credit-card market. In 1999, the hot introductory rate was 2.9 percent. In 2000, it was 1.9 percent. This year? Zero...

[I heartily recommend reading the rest of the article, I just wanted to highlight the increase in household debt and the basic expansion of credit. --Andre]

-- Andre Weltman (aweltman@state.pa.us), May 22, 2001

Answers

My 15-year-old daughter got a pre-approved credit card offer last week with a 0 percent introductory rate. Her older sister gets at least one or two a week. My wife and I get a couple every day. Yesterday's mail brought an offer from one company (Provident?) promoting 0 percent on tranferred balances and 1.9 on purchases through September. Madness.

-- Cash (cash@andcarry.com), May 22, 2001.

My 37-year old son, who hasn't worked in four years, gets these offers regularly.

This gives you a lot of faith in the soundness of our financial system, doesn't it?

-- RogerT (rogerT@c-zone.net), May 22, 2001.

I personally know one person who filed bankrupcy (under the old law) and had several cards within the following 2-months. They were, of course, "secured cards". However, within 6-months of using the cards and paying them off every month, offers of un-secured cards came rolling in.

No wonder the credit card companies were complaining about the bankruptcy laws in the U.S. and fought to have them toughened.

I just don't understand the credit business, I guess.

-- PHO (owennos@bigfoot.com), May 22, 2001.

To opt out on your credit rating from receiving those stupid offers of $50M worth of credit card debit, or the mortgage offers of just sign here and we'll mail you a check for $xxx,xxx,xxx.oo at 33% apr secured against your children's future call 1.888.5.opt.out (567.8688) to get a FREE copy of your EQuifax credit report 800.755.3502 -- follow the prompts, and make sure you don't pay for it, or try 800.685.1111. By law you're allowed one free copy a year, unless you dispute an entry or you've been refused a loan then you can request another copy.

beware of providian and ATT's universal card both have class actions lawsuits, pending or resovled, for delaying the receipt of payments to rack up fees and penalties.

-- (perry@ofuzzy1.com), May 22, 2001.