Consumers with less-than-perfect credit may have an easier time getting a credit card.
Share of total new account originations
|Subprime||Near prime||Prime||Prime plus||Super prime|
|Q4 2007||Subprime: 22.13%||Near prime: 15.45%||Prime: 25.03%||Prime plus: 21.92%||Super prime: 15.46%|
|Q4 2008||Subprime: 16.12%||Near prime: 13.20%||Prime: 25.15%||Prime plus: 26.92%||Super prime: 18.62%|
|Q4 2009||Subprime: 13.37%||Near prime: 11.55%||Prime: 22.98%||Prime plus: 30.99%||Super prime: 21.10%|
|Q4 2010||Subprime: 13.74%||Near prime: 14.29%||Prime: 25.24%||Prime plus: 28.39%||Super prime: 18.33%|
|Q4 2011||Subprime: 13.05%||Near prime: 14.77%||Prime: 25.77%||Prime plus: 27.72%||Super prime: 18.69%|
|Q4 2012||Subprime: 12.31%||Near prime: 14.97%||Prime: 27.53%||Prime plus: 27.31%||Super prime: 17.87%|
|Q4 2013||Subprime: 13.25%||Near prime: 15.70%||Prime: 27.80%||Prime plus: 25.20%||Super prime: 18.05%|
According to new data from credit bureau TransUnion, the non-prime population makes up a bigger bulk of all new credit card loans, rising to 28.95 percent in the fourth quarter of 2013 from 27.28 percent in the fourth quarter of 2012. TransUnion defines "non-prime" as consumers with a VantageScore 2.0 lower than 700.
"We have continued to see a rebound in that market which indicates that lenders have become more open," says Toni Guitart, director of research and consulting in TransUnion's financial services business unit. But analysts don't have to worry about a subprime lending boom in the credit card marketplace just yet.
"A lot of that increase is coming from what we call near-prime (consumers)," Guitart says. These consumers have scores of 640 to 699. TransUnion considers consumers with scores below 640 to be "subprime."
The credit bureau has seen steady growth in the near-prime market since early 2010, while subprime lending has merely stabilized after bottoming out that same year. Pre-crisis, in the fourth quarter of 2007, the non-prime population represented 37.58 percent of all credit card originations.
Guitart says it's tricky to generate forecasts from TransUnion's data, since "conditions can change so suddenly." However, there are signs that nonprime lending will continue to pick up steam. While issuers have done a good job originating new accounts, the total size of credit card balances has not increased significantly.
As such, "if lenders want to grow their market, they will have to get creative," Guitart says. "One of the ways (to do that) is to lend to groups that are traditionally more borderline."
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