Bad habits from credit cards once again - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » Bad habits from credit cards once again

Bad habits from credit cards once again

Bad habits from credit cards once again
The content is accurate at the time of publication and is subject to change.
This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.

It would be worthwhile to think about how the whole economic crisis began at the first place. In an oversimplified version it will suffice to say that banks and creditors lent money to those people who couldn`t afford to pay back. When the money owed wasn`t paid back the whole system collapsed. But, patterns indicate that we are going back to the same mistake once again. That is because credit card issuers and banks are once again providing credit cards to people who have bad credit scores or a bad credit history. As it has been pointed out by many experts of the industry, since the beginning of recession in 2007, creditors have lost a whopping 189 billion dollars on their credit cards, a big reason why some of them needed a bail out.


However, riskier borrowers are once again being enticed by banks and lenders who want to prove to themselves more than anyone else that the risk is worth taking. For example, in recent times, Capitol One gave out as many as 22 million card offers to those customers who have a bad credit score. HSB gave out 16 million new cards. Citigroup and Discover have give out 14 million and 10 million new cards respectively. All in all, as many as 2.5 billion new credit card accounts would have been opened this year. The percentage of people who would be getting the new credit cards without deserving them is 17% which has more than doubled. It was just 7% last year. One might wonder what is leading to this massive change.


According to creditors, some people saw their credit scores dropping rapidly because of the decline in real estate prices and also unemployment. However, these offers are not typical credit card applications. The banks are behaving smartly and one must understand that the new cards will cost them through higher interests and higher fees.


The credit card offered by Capitol One, for example, has an APR of 18% and an annual fee of 50 dollars. Bank of America, Citigroup and Wells Fargo are all offering secured credit cards, where the cards would be associated to the bank accounts to which the banks have access to. Although risky, these card offers are being lapped up by the customers. This is because lot of people find it hard to make do without the credit card. In fact it is a basic necessity for some people.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

Discover Cuts Price Protection Benefits from Credit Cards

Posted: August 20, 2018

If you have a Discover card and like the Price Protection benefit that comes with it, you might want to take advantage of it sooner than later. Discover has decided to do away with this benefit. This benefit will no longer be part of your ... Continue reading
The New Citizens Bank Cash Back Plus World MasterCard

Posted: August 17, 2018

Citizens Bank has rolled out their new Cash Back Plus World MasterCard, offering cardholders 1.8% cash back when they go shopping. This is an upgraded version of their previous card. With this new version, cardholders can earn unlimited ... Continue reading
Bonus for the IHG Rewards Club Premier Card Gets an Upgrade

Posted: August 16, 2018

Have you been thinking about applying for the IHG Rewards Club Premier credit card? If so, you may want to check it out now because they just increased the bonus - bumping it up from 80,000 points to 100,000 points. Cardholders get the ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
INTRO OFFER: Discover will match ALL the Miles you've earned at the end of your first year, automatically. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% - 25.74% based on your creditworthiness
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!