After slowing down for about 3 years, lenders and banks have started rolling out card offers to many people whose credit ratings had been severely dented during the economic crisis. This also involves credit being extended to individuals who have gone through foreclosures, unemployment, charge offs or other forms of economic setbacks half a year ago. These new credit cards, according to reports, are coming with higher interest rates, which is where the card customers must be careful in picking and choosing the best options.
One of the approaches taken by creditors is to extend new lines of credit to customers without actually going through the traditional process of credit checks in order to assess the risk presented by a customer. Instead, a lot of companies are trying to observed tendencies in behaviour which include registering at job sites which shows that they are trying. Credit card issuers have slackened their approval process a bit. However, that doesn`t mean that they are pre-approving credit cards for all the customers. Instead, they are using novel ways to classify two credit card customers who have the same credit scores.
This process also involves offering credit cards to strategic defaulters, whose credit rating had been ruined when they went on foreclosure purposefully. These borrowers have made bad decisions in the past in terms of finance, but are safer from a credit card issuer`s perspective compared to many others. First-time defaulters, belong to another category card issuers are looking at. These are people who had a very good credit history to start with but due to the economic crisis had missed payments, either because of loss of a job or some other financial ailment.
There are various other segments, which are getting revisited by credit card issuers once again as new offers are being rolled out to various customers. Sloppy payers are another category where the customers pay some bills and don`t pay others. Abusers are another category where the customers frequently make late payments. Distressed borrowers are those people who don`t have the means to make payments on the credit card. Lenders are now trying to prove that it is worth taking a risk with such customers. Lenders have seen dropping revenues in recent times in the tune of 189 billion dollars and have tried to give credit only to wealthy customers. However, that might change, although customers are better off trying to compare the various offers and being careful about the payments.