Credit Card Companies Begin Flirting With Subprime Borrowers Again

After getting all hot and heavy leading up to the recession, then turning completely cold shoulder, credit card companies are once again starting to selectively flirt with subprime borrowers.

MarketWatch reports that banks have issued a brisk 5.4 million new cards to subprime borrowers, defined here by Equifax as people with credit scores under 660, since the beginning of this year

They are doing it tentatively, though. The credit lines are small. The interest rates are high. But issuers are looking at the “meaty” part of the distribution between 620 and 650 and trying to figure out which customers might be “undervalued” in terms of credit score not because they’re bad borrowers, but due to circumstances beyond their control, like losing their jobs.

“The banks and the stand-alone card issuers are under constant pressure to increase earnings and kind of push the envelope,” Ben Woolsey, director of marketing and consumer research at, told the WSJ.

Card issuers circling subprime borrowers again [MarketWatch via LowCards]


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  1. Coffee says:

    Suck it, credit card companies…There’s an old saying in Tennessee — I know it’s in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can’t get fooled again.

  2. LanMan04 says:

    Hey, bailouts last time, bailouts this time! What can go wrong?

  3. dush says:

    People with no job, just the people who need more credit cards.

  4. chemmy says:

    Judging by how easily my deadbeat brother can finance stupid crap for his car (rims, tires, stupid nonsense) and not pay it again and again…. I’d just assumed they never stopped lending to subprime borrowers.

  5. Scamazon says:

    Hmmm, and the GOP wonders what Occupy Wall Street is all about. Ah, you cant regulate stupid but you can sure lend them money.

    • Hedgy2136 says:

      That’s a pretty brilliant comment. Have any idea how many multi-millionaire Democrats are in congress? Or how many Billionaire Democrats there are? You only wish there were a difference beyond labels, don’t you?

      • RvLeshrac says:

        Have you noticed how many of them keep voting themselves higher tax rates?

        They’re not exempt from those, you know.

    • witeowl says:

      Huh. My version goes like this: “You can’t regulate stupid, nor can you stop them from lending money to the wrong people.”

  6. Cat says:

    Human input on lender’s decisions would go a long way in sorting out what borrowers are credit worthy. A credit score is just a number.

    A simple phone call to someone who is seeking credit and has a score between 620 and 650 for more information might be all that’s needed to make an informed decision.

  7. Jane_Gage says:

    I noticed that my score did indeed take a five point hit for closing a credit card. So theoretically I could lose 55 points if I closed all my cards. I would still be north of 655, but my financial responsibility would be the same. (Most are store cards I got in college for the purpose of “establishing credit.”)

    • Ihmhi says:

      Perhaps you should gradually close them out until you’re at a more manageable level, say one every 6 months.

      I wonder if a you can get out of the penalty by waiting for a card to expire?

  8. Oranges w/ Cheese says:

    Considering my credit is stellar and I recently was approved for a whopping $400 credit card (for groceries @ Meijer) I can’t imagine what sort of measly limits these cards have.

    • Such an Interesting Monster says:

      Most are $250-$300

    • Yomiko says:

      Meijer is one of those chains I’d like to check out, just to see one store. Do you spend more than $400/month there? I don’t spend that on stuff for myself, but I could see a family needing more of a line than that.

      • Oranges w/ Cheese says:

        I drive 60 miles one-way to work and back every day, I got it for groceries ( to more easily split the bill with my boy friend who lives with me ) and also so that I could get the 5c discount per gallon on gas ^_^

        We usually spend about $200 monthly on food and I spend about the same on gas. It was just kind of annoying because we filled up the card constantly so it defeated the whole purpose of getting it.

  9. Yacko says:

    In order to survive a rat must chew and a shark must swim.

  10. Twonkey says:

    “But issuers are looking at the “meaty” part of the distribution between 620 and 650 and trying to figure out which customers might be “undervalued” in terms of credit score not because they’re bad borrowers, but due to circumstances beyond their control, like losing their jobs.”

    So…it’s not that they’re giving folks without jobs credit-cards at all.

    • Twonkey says:

      This comment was supposed to be in response to dush’s post above, but the site’s commenting system is a broken mess.

  11. Ed says:

    Sweet! That’ll kick-start the economy.

  12. witeowl says:

    Random story:

    When Tiny Tommy was younger, he ran up a big debt with loan sharks. When his legs were threatened, Mommy paid his debt. Bonus: Tommy never had to pay Mommy back. You know what he learned? Right. Go ahead and mess up; Mommy’ll clean up after you.

    Not that this in any way relates to the issue at hand, mind you. I just felt like sharing.

  13. FrugalFreak says:

    Trying to pacify the occupiers.

    No Bite.

  14. jonathanwthomas says:

    I have a credit score so low it’s able to power a black hole (very long story) and I was surprisingly able to get a car loan last week with instant approval. So, yeah, I guess they are starting to look at sub-prime people again as I have a nice car sitting in my driveway to prove it.