Why are balance transfer credit cards coming back?
Credit card offers are subject to “market conditions” which is a good way to say “whether or not the economy is a cause for concern”. And at the start of Q2 2020, things looked bleak.
Unemployment peaked at 14.8% in April 2020, down from a low of 3.5% in January 2020, according to data from the Bureau of Labor Statistics. An April 2020 Federal Reserve investigation found that banks tightened lending standards for credit cards and other loans during the first quarter of the year. To reduce their risk, banks removed balance transfer cards that allowed consumers to borrow large sums at 0% interest.
Now things are improving. Unemployment in April 2021 was 6.1%, according to the BLS. An April 2021 Federal Reserve investigation found that banks were relaxing the standards for credit card applications – the exact opposite of what happened a year ago. And according to Competiscan, a company that tracks and analyzes direct marketing activity, 51% of credit card offers mailed in the first quarter of 2021 included a balance transfer offer, an increase from the previous two quarters.
In other words, when it comes to credit cards, nature heals.
Where can you find balance transfer credit cards?