Borrowers warming up but still cautious
San Francisco, CA -- (SBWIRE) -- 10/08/2012 -- In the United States, credit cards are a quality gauge of both the country’s progress as well as a gauge on the health of small business owners. With both small business and the general strength of the economy becoming key issues in the election season, the credit card landscape looks to offer a wealth of opportunities.
In the last twelve months, there is good news as consumer spending is on its way up. The projection $43.5 Billion in credit card debt, most of which will be dealt out in the last quarter. For businesses that means maximizing the potential revenue during this period of purchasing.
The spending by consumers is driven from credit availability. Such availability is a product of the softening of delinquency, charge-off, and unemployment rates. Delinquencies and charge-offs have fallen 20% and 37% since last year. Unemployment continues is slow but steady fall to 8.3%.
Some have concerns that we may not have learned our lesson when it comes to the nature of credit. As was realized a half a decade ago, there is a tipping point wherein there are disastrous effects when credit debt is not taken seriously. Even if Americans have learned their lesson, if consumers began to fear that reaction again, the spending will likely come to a grinding halt. Neither outcome is great for the economy.
Still, with less pressure being put on the bottom line, companies have been able to offer more attractive credit cards. These cards come complete with reward bonuses and zero-percent interest. These perks are surely helping the consumer spending. Zero-percent balance transfer APRs are offered for 38% long than last year’s numbers. New purchases have grown nearly 20%. Initial rewards bonuses are up almost 40% more valuable.
Small businesses should be on the lookout for particular cards that offer the best perks and most practical protection. General-consumer cards have been known to open small businesses to more liability; however, that is not always the case. Citi Diamond Preferred Card offers 0% on balance transfers for 15 months with no transfer fees. This makes it a great card for any small business start-up.
When it comes to small-business cards, the Capital One Spark Cash for Business offers 2% cash back on all purchases. In general, small business cards that can be paid off in full at the end of the month are wholly valuable.
The trends in the credit card landscape show that consumers are trending more toward credit cards again, especially for short-term small business owners. Still, the totality of the national climate is a fragile kind of confidence.
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