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Competitive credit card offers on the rise with better economy

Undated file photo of a Visa credit card.

May 7, 2012 12:00:00 AM PDT
Even though many Americans are still shoveling out from under debt, banks are once again starting to send out new offers for credit cards.

Stacks of credit card offers have been filling Miranda Marquit's mailbox.

"I've noticed a big difference from last year to this year," Marquit said.

That's because big banking changes are happening right now starting with an increase in the number of credit card applications being mailed out to certain consumers across the country.

"Credit card issuers have come out of their shell," said Greg McBride of Bankrate.com. "They're now back on offense. They are trying to grow their businesses, but they're trying to do so primarily through top credit quality consumers."

That's why Marquit, who has excellent credit, is getting so many offers. Experts say if you have a credit score of above 740, now is the time to shop around for single-digit interest rates, balance transfer offers, cash back cards and premiere reward programs.

"If you have strong credit, you're really in the driver's seat," McBride said.

Even if the offers are coming your way, it doesn't necessarily mean you should take them. Credit experts say as always, compare rates being offered to what you already have. And remember, if you just dug out of being deep in debt, you may want to hold off on extending yourself again, especially if it was a real struggle. Banks will most likely be sending offers to you, too.

"We are seeing them reaching out and testing the waters with people who maybe have had some problems over the economic downturn or who are new to credit," said Nessa Feddis of the American Bankers Association.

Why the credit push? Banks now make more money from swipe fees when people use credit versus debit cards. And in the big picture, the U.S. financial future is looking a bit brighter than it has in the past few years.

"The economy has stabilized," Feddis said. "It's more predictable about who will be able to repay their debt. They've eliminated a lot of the debt that people weren't able to pay."

Marquit said that although she looks through the offers to see if any of them make sense, most of them end up in the shredder because she has enough credit cards.

If you're thinking of getting a new card, be patient. You can expect more credit card promotions as the year goes on, and that means more competition and better deals, especially no balance transfer fee offers.

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