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Subscribe to RSSMost of us probably remember the good/bad old days before the financial crisis, when it seemed like anyone with a pulse could get a credit card.
Those days aren’t exactly back, but a new report from SmartMoney says banks are sharply increasing the number of credit card offers they send to people with less-than-stellar credit.
SmartMoney, citing CardHub.com, reports a 300 percent increase in credit card solicitations for subprime borrowers since June.
Those borrowers, who have credit scores of 620 to 660, tend to be among the most lucrative sector for lenders, because they are charged higher fees and also may be more likely to rack up late fees and other expenses.
They tend to be the riskiest for lenders too, because their precarious financial situation makes it more likely that they won’t pay back their debts.
Consumers who take companies up on these credit card offers should be sure to read the fine print. SmartMoney, also citing CardHub.com, says the average interest rate for subprime accountholders is 20 percent, and nearly all them carry an annual fee. The cards also tend to have very low credit lines of under $500.
The financial publication says the most common solicitors of credit cards for subprime customers are large lenders such as Capital One and HSBC, who say they are trying to provide access to credit to more borrowers.
As more banks start offering cards to people with lower credit scores, the question is whether people will go back to the freespending ways that left many drowning in debt.
The financial crisis and recession certainly seemed to be a wake-up call for many. Revolving debt, the measure of American consumer debt that includes credit cards, has fallen for 27 straight months, according to Federal Reserve data through November. But Americans have recently shown more willingness to borrow money for things like cars and college expenses.
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Have the banks learned nothing? I sure hope consumers have and that we don't forget. The banks claim to be trying to allow access to more credit, as if they are doing sub-prime borrowers a favor. Rest assured they are only in it for the profit. And while the article points out that the banks take a higher risk by signing up these sub-prime borrowers, you can also rest assured that tax benefits from writing off those losses benefit the banks regardless. If you can't pay cash, you can't afford it.
Sure they've learned. They've learned that they can just get bailed out with little chance of retribution.
Don't see where more credit cards will help if there are fewer jobs for people to work to make the money to pay for the cards.
Mark Greene!!!!! sound familiar???? Why Isn't he the ceo over at "Fair Isaac" AKA FICO, where people's "credit scores" are Books cooked, screwed around, lowered, and generally dragged through the C@tSh!t so marks FICO NippleBuddies at the banks and credit card companies personally deliver CASH under the table to good ole' boy mark...Like Spiro Agnew taking cash bribes as VP in the executive mansion; Spiro Agnew!!!??? Great Balls of MozerellaCheese!!!!!They don't make Americans like that anymore!!! Oh Yes they DO!!! MarkGreene!! ceo and Rubber h0le bendOver Butt Pop Buddy for his finance Masters. Generally, The Whole "FICO CREDIT SCORE" System is another Scam Shell Game setting up People Like Rubber Ducks ready for a REAL Soaking!!!! Pay by Debit Card, Check or Cash and let Mr.Greene and His StandingStud Masters make Tons of Cash off of each Other....The Evil Rich SCREWING The Evil Rich, Now That is a Show worth watching on Prime Pop Time!! We Wholesome Americans can watch from the safe sidelines of NO DEBT.
Why shouldn't they? They have no risk here, if too many people default, we'll just bail them out again and pay for their losses. If I could go play video lottery and knew that the government would bail me out if I lost, I would never leave the deli.
Why not? The borrowers have nothing to lose and the banks can always turn to their capitalist friends in D.C. for a bailout. Bush started "privatized profit and socialized losses" and the Republicans like that kind of entitlement for those who contribute to their coffers.
Yeah, because Democrats weren't involved at all. Nice logic gap there, tjohn.
Bush could have vetoed the package instead of signing it. Bush liked to use his veto powers. Bush liked the line item veto too. But on October 3, 2008 he signed. After 9/11 Bush's agenda was about keeping America safe but he wasn't concerned about keeping us safe from big oil, corporate America and the banking institutions (with such practices as 'credit default swaps') knowing that his conservative base, with time, would blame the Democrats for everything, when his administration could have and should have done more to protect the financial interests of the American people but did not.
<sarcasm>
Yay. I can now go buy stuff I can't afford. Thank you fellow Americans for helping me enjoy that stuff for some time at least.
<end sarcasm>
So I get an offer: Borrow up to this, at this (apparently low) APR to consolidate your other cards. Good Idea? Nope, I sat & crunched the numbers and overall I am paying less and clearing my cards quicker doing what I am doing than using this "consolidation"
As it says in the article "be sure to read the fine print"
no thanks
Easing of credit is a good thing, it helps people spend, which helps the economy. The credit markets have been tied up for too long, people with a 650 score aren't useless because of a simple score... Many people lose jobs, and are completely capable of picking back up payments when the storm has passed. People deserve a break, otherwise we'll end up with a stale economy.
Unfortunately many daily living and business functions are made much easier and therefore foster the demand for Credit Cards. Debit cards don't always work the same way as CC's and if used properly and with moderation, this renewal of credit isn't necessarily a bad thing for those who got creamed in this economic downturn.
Remember those nasty little notices banks have been mailing us the last 2 years? Increased rates, lowered limits, adden fees, higher fees, change in interest rates etc?
Not much one could do, but at least I was lucky enough to stop using those cards altogether. Despite the "new and improved" enticements, I'd think I'm just pitching their offers out and continue to savor being without credit card debt.
I feel so sorry for those poor banking exec's, at some point there wont be tax monies to bail their greedy posteriors out.
oh, yeah, BuncoBank is your friend, indeed. /scathing_scarcasm
paid one card in particular off, they immediately dropped it, "cut up your card" letter and all. on seeing I paid a slug of other cards off, they sent me a regular monthly statement with a $15,000 credit limit.
almost expect these guys to send stacks of money in the mail unasked, to put on the card at 20 percent.
there's a reason I'm serious about getting the last card paid off this year. I can see a life ahead.
Paid off my credit cards sometime in the early 90s (after getting free of plantiff #2), if I can't pay cash or pay the credit card off that month, it doesn't happen. Sure does free up your life not to be a slave to a bank.
John, I hope you are also saving in addition to keeping your debt down. That's where the real freedom comes in...not having any debt (other than maybe a car or mortgage) AND having money in the bank. I have a new car and a mortgage that is well below my means, and I have zero credit card debt and no outstanding bank loans. I save for my vacation all year long and pay for it all with cash. I take my lunch to work everyday. I use coupons at the market. When I want to splurge on some fun or dinner out, it's not even a blip on the radar thanks to my modest lifestyle.
I agree, I think everyone should do without credit cards. Imagine how great your life would be not owing the bank then you can pay yourself and save.
mark greene does not like you
check out to learn first
wow this site is great for TV Reviews
Funny how Federal Reserve Governor Elizabeth Duke noted the massive 15 percent drop in consumer credit card balances just one short month ago as noted in this article:
http://viableopposition.blogspot.com/2010/12/central-banks-and-your-credit-cards.html
Sickening. No wonder the U.S. is in the mess it's in.
We never spent it if we didn't have it, and guess what?
We are debt-free! I don't feel sorry for people who are so in hock up to their ass that they will never be free.
Didn't anyone ever tell you: Don't spend more than you earn?
"As more banks start offering cards to people with lower credit scores, the question is whether people will go back to the freespending ways that left many drowning in debt."
Obviously, Allison Linn does not know anything about WHY many people even use credit cards to begin with. This entire article is so naive it is unbelievable. As usual, courtesy of the MSM misinformation machine, the onus is put directly upon the consumer--while allowing the banksters to be the "victims."
"Freespending ways??!" Are you kidding me?! Rein in/regulate the banks--Stop the illusion of 'easy' credit offers. Capital One should be fined for their abuse of utilizing late fees, over-the-limit-fees, increasing interest rates for late payments on OTHER consumer credit accounts, etc., --all against consumers. Banks greedily suck up the profits from CC accounts various fees, even from more creditworthy cardholders, something not mentioned in this fluff piece.
Allison Linn has absolutely no idea what she is writing about. It would be interesting to read an HONEST and well researched article on CC and consumer loan banks, focusing on the profits they reap off the backs of consumers--many whom are simply trying to make ends meet, (including caring for their families), in tough economic times. That kind of truth will not be found on MSNBC, as the MSM is OWNED by financial corporations, "journalists," included.
It is the banks who are screwing the consumer with their "freespending ways," NOT consumer overspending.
"As more banks start offering cards to people with lower credit scores, the question is whether people will go back to the freespending ways that left many drowning in debt."
Obviously, Allison Linn does not know anything about WHY many people even use credit cards to begin with. This entire article is so naive it is unbelievable. As usual, courtesy of the MSM misinformation machine, the onus is put directly upon the consumer--while allowing the banksters to be the "victims."
"Freespending ways??!" Are you kidding me?! Rein in/regulate the banks--Stop the illusion of 'easy' credit offers. Capital One should be fined for their abuse of utilizing late fees, over-the-limit-fees, increasing interest rates for late payments on OTHER consumer credit accounts, etc., --all against consumers. Banks greedily suck up the profits from CC accounts various fees, even from more creditworthy cardholders, something not mentioned in this fluff piece.
Allison Linn has absolutely no idea what she is writing about. It would be interesting to read an HONEST and well researched article on CC and consumer loan banks, focusing on the profits they reap off the backs of consumers--many whom are simply trying to make ends meet, (including caring for their families), in tough economic times. That kind of truth will not be found on MSNBC, as the MSM is OWNED by financial corporations, "journalists," included.
It is the banks who are screwing the consumer with their "freespending ways," NOT consumer overspending.
Is it CreditHub.com or CardHub.com? I am pretty sure it is the latter:
My husband and I got totally frustrated with the whole FICO-SCAM. This year we are getting all debt paid off (and we don't have all that much), ramping up the savings, paying cash for what we need. SCREW credit scores.