Banks cut back on new credit card offerings. Good news or bad news?
Filed under: Banks
Equifax, one of the three largest consumer credit reporting agencies, is reporting that banks have issued 9.8 million new credit cards this year so far, which is 38% less than they issued last year.No big surprise, but it's always interesting to see the actual percentages on just how bad things are. Or, of course, depending on your point of view -- how good things are. After all, as a 39-year-old, I can look back on my '20s and easily think the credit card companies gave me one or two too many credit cards. Maybe this 38% drop will help some people stay out of debt.
That said, I'm sure plenty of responsible people have likely been shut off from a credit card as well, and certainly many of the best and brightest financially-savvy people are seeing their credit limits lowered. According to the new Equifax numbers, the average limit on a new card has dropped 3%. The average limit on a new credit card is currently $4,594.
But while 3% isn't much, some people, whose credit lines are or were far above the average, are obviously seeing their credit limits plunge. One of my best friends recently watched his $30,000 credit line drop to $5,000 for no apparent reason, and this guy is one of the most responsible people I know, not just with money but with every aspect of his life. And as irony would have it, he works at a bank.
Reader Comments (Page 1 of 1)
7-08-2009 @ 9:34AM
janscolofsky said...
About a year ago my credit was a mess from medical bills and some overspending. If you've never had that problem you can't believe how it messes up your life. It's hard to buy any big ticket item or even get a good job with bad credit. I found a blog, http://www.fastcreditrepairs.info/ ,that really gave me the information I needed to get my credit and life straightened out. It helped me so well that I was recently able to buy a car and pay the lowest interest rate possible. If you have credit problems you might want to check it out
Reply
7-08-2009 @ 2:25PM
NancieK said...
I get that banks are pulling back on the amount of credit extended to people but they are also screwing our credit scores in the process by upping our debt ratios. Now most people who had $15k credit limits that are down to $5k with a maxed out card. But see if banks care...
Reply
7-09-2009 @ 10:23AM
AlessandroMachi said...
Instead of completely slashing so many credit lines of people who are upstanding crediteers (dare i use that phraseology) banks could have "capped" the amount one could borrow each month.
It's the complete cutting off of all credit in one fell swoop that I find hypocritical. While some media stations covered / lobbied for the bailout bill to pass during Bush's term, and then did the same for the stimulus Package for Barack Obama, the key component was, Banks needed it NOW, and something was done to "help" them.
The same approach should have been used for the consumer, but with a healthy braking system in place. Your friend, with a stellar payment history, should have been put on a credit card diet, not a starvation plan.
simply limit the use of his 20,000 dollar credit card to 500 dollars a month in new purchases. This protects both the banks and the consumer.
Those with no debt on their cards could have had the monthly minimum payment raised to 5% since it is less of a hardship if one has a zero balance while also having a monthly limit on overall usage of the card.
Credit Card Companies are suffocating the consumer, and I blame Chase Bank for leading the "charge".
http://www.daily-protest.com
http://www.bloggersagainstchasebank.com
Reply
7-09-2009 @ 11:11AM
sissy1895 said...
Susan recommended me a very hot website ***http://SeekRich.com *** where wealthy singles looking for someone to enjoy their wealthy lifestyle with:)
Reply