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Just after we get news that banks are giving more credit cards to Americans with not-so-pretty credit and offering bigger credit limits to everyone, we hear late payments are rising again after more than two years of declines.
So will the latter unhinge the former?
First, the good news: Equifax said earlier this month that banks issued 5.4 million credit cards to subprime consumers in the first six months of the year, up nearly two-thirds from last year. Three out of every 10 new cards belonged to someone with riskier credit.
And the cards didn't stink either. Credit card limits for subprime consumers increased 68 percent from last year.
Overall, banks issued 18 million credit cards during that time, a three-year high. Credit limits for the new cards grew 27 percent over the same period in 2010.
But those are old numbers. All that happened when credit card issuers were reporting a slide in delinquencies. Not anymore.
On Monday, six of the largest credit card issuers -- Bank of America, Capital One, Discover, Citi, Chase and American Express -- all posted rises in the percentage of cardholders who were at least 30 days behind on their credit card bill in September.
But let's not get too dramatic; most of the increases were modest. And expected.
There have been some troubling trends bubbling to the surface. Consumers have been spending the majority of their money on necessary items, such as food and gas, and cutting out fun expenditures. Add to those cutbacks, falling incomes, rising poverty and decimated household wealth. It's ugly out there, and it makes sense more people are late on their bills.
The real question is: Will this teeny rise in delinquencies make issuers feel queasy about offering credit, especially to those with spotty credit records? If so, expect a longer road to recovery in a consumption-focused economy.
At least it might cut down on the credit card offers in your mail.
Are you a subprime consumer, and have you received any good offers?
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Surpisrnigly well-written and informative for a free online article.
And beware the wonderful transfer costs.
Sometimes that alone makes it not worth it.
In most cases, you can transfer the balance of any kind of debt to a VISA/MC/Discover/AmEx credit card. Depending on how your balance transfer offer is handled, you may have the option to just write balance transfer checks to the other accounts, or provide the account number of the account to be transferred to your credit card issuer and they pay off the balance, or you can write the balance transfer check to your own bank account and use the cash any way you choose.
I know I can transfer the balance from one bank credit card to another so I can get a lower interest rate, but can I transfer the balance from a department store credit card (i.e., Nordstrom) to a Visa/MasterCard bank credit card?