Do you think the incoming Obama administration will take credit card industry reform seriously?Yes. I know that part of Obama's platform had some consumer protections in there regarding credit card reform and bankruptcy reform -- a couple of things that all of us in the consumer credit industry have been keeping our fingers crossed about. It should bode well. The credit card industry, like the entire financial industry right now, is changing so much that it remains to be seen what's going to be leftover in six months.
Some credit card issuers will advertise premium credit cards with a great balance transfer offer but reserve the right to offer you another less attractive card depending on your credit score. Can it hurt your credit score if you choose to decline the alternate card because you find the terms to be less than favorable?
There are a couple of different factors that can hurt your score. One is just the inquiry itself, although that's not really too damaging because it's only 10 percent of your score. If the card does get reported to the credit bureaus, which can happen even if you never activate, and it's subsequently closed, that can damage your score, but luckily in most cases if you just call and cancel the card right away, it doesn't get reported. I would say it's best to cancel within 30 days or just right away because each company has their own policies for how they report it.
Bankrate's survey also indicates that 15 percent of Americans don't plan on using credit cards at all next year; 32 percent will probably charge less and 50 percent won't change their credit card usage. Only 1 percent said they would probably charge more. Any thoughts about these results?
I think that's optimistic and I like the trend that's presented there that consumers are feeling a little bit more wary of credit -- which I think is good for us considering where we stand with the economy -- and that they're feeling that they intend to use cash and build up savings and be more financially responsible. Unfortunately, what we see on the actual result end of these things is people are using their credit card a lot when people face job loss or other kinds of financial hardship. They see the credit card as a good safety net. With all the tough times coming up in the year ahead, I think that we're actually going to see more credit card usage.