Confidence Down for Non-Prime Credit Card Applicants - 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 » Confidence Down for Non-Prime Credit Card Applicants

Confidence Down for Non-Prime Credit Card Applicants

Confidence Down for Non-Prime Credit Card Applicants
May
3
The content is accurate at the time of publication and is subject to change.

Feeling confident about your creditworthiness when looking to get a new credit card or a loan can make a world of difference, but the confidence level for non-prime consumers is down, according to a new study by Elevate’s Center for the New Middle Class (CNMC). They found that two-thirds of people who fall in the non-prime category, meaning those with a credit score of less than 700, were markedly less likely to use traditional financial institutions to get credit.

In fact, many headed to online banking venues to do their banking. Why? They felt that brick and mortar banks had not created products for them. For Elevate, these results brought home the fact that many Americans are caught in a credit crunch.

“Unfortunately, this study indicates what so many Americans experience every day. When faced with a hurdle in their financial journey, the non-prime simply do not have the option of relying on a bank or traditional financial institution as a backstop,” said Jonathan Walker, Executive Director of the CNMC.

“Across the board, we see that the non-prime have little confidence a bank can provide for them, yet surprisingly most indicate a bank would still be their first choice for a personal loan,” he added.

Non-prime Americans struggle

The study found that people in the non-prime category struggle more and that they are four times more likely to have been rejected for a loan during the past 12 months.

They are also eight times more likely to refrain from using a bank, and six times more likely to do their banking via financial institutions that only use an online model, rather than opting to visit brick and mortar banks.

They are also 21 percent more likely to believe that their bank has not created products with them in mind. Last but not least, when it comes to personal loans, they are 48 percent less likely to get approved if they move forward and actually apply for one.

Non-prime Americans also tend to experience income volatility, which means that having access to credit is something they need, whether that means getting a loan or a credit card.

Given all this data, it is not surprising that Elevate found that 1 in 12 of these Americans are not currently using a traditional financial institution to take care of their daily financial needs. They see going online as their best bet when it comes to getting their financial needs met.

Loosening regulations

Elevate believes that the loosening of regulations may help banks meet the needs of non-prime consumers. “For centuries, we have relied on banks to meet our financial needs—both big and small. Today, many Americans do not have that luxury. With the changing regulatory environment, banks may finally be able to serve this population again, either by partnering with financial technology companies, creating innovative new products or by finding new means of underwriting their financial products,” said Walker.

The study by Elevate’s Center for the New Middle Class was carried out from February 2, 2018, until February 5, 2018. During this time they spoke with 1,005 consumers in the United States. Among the respondents, 595 had prime credit scores while 298 had non-prime credit scores.

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:

The New Chase Starbucks Rewards Visa Card
The New Chase Starbucks Rewards Visa Card

Posted: February 08, 2018

Starbucks and Chase have joined forces to roll out the Starbucks Rewards Visa Card, letting cardholders earn rewards every time they buy a latte, a cappuccino or anything else at Starbucks - and they also earn rewards on all other... Continue reading
Earning More Rewards at Whole Foods with the Amazon Prime Rewards Visa
Earning More Rewards at Whole Foods with the Amazon Prime Rewards Visa

Posted: February 28, 2018

The acquisition of Whole Foods by Amazon has upped the ante for Amazon Prime Rewards Visa cardholders because they now earn 5% back when shopping at the Whole Foods Market, whether they are buying groceries, organic vegetables, body care... Continue reading
The New Iberia and Aer Lingus Visa Signature Cards
The New Iberia and Aer Lingus Visa Signature Cards

Posted: March 22, 2018

Chase Card Services has partnered up with the Avios Group to roll out the Iberia Visa Signature card, and they are planning on launching an Aer Lingus Visa Signature card during the spring. With these cards, customers will earn three Avios... 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 and more 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. That's $600 towards travel!
For Excellent, Good Credit
Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay
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!