Reply
Established Contributor
pipeguy
Posts: 716
Registered: ‎10-31-2011
0

Is the Sub-prime Market Growing? (article)

  • Bank credit cards: Lending to sub-prime consumers showed a 41 percent increase from 2010 to 2011 as sub-prime borrowing hit a four-year high in December 2011 with 1.1 million new bank credit cards issued. New sub-prime card limits grew 55 percent from 2010 to 2011. At $12.5 billion in 2011, bank card limits are at their highest level since 2008 ($27.4 billion). Bank credit card growth continues, but is still well below pre-recession levels. In 2011 39.9 million bankcards were opened, an 18 percent increase from 2010 and the highest total since 2008. The increase in total bank credit card originations was accompanied by a 31 percent rise in total credit limits from 2010 to 2011. They year 2011 marked the first time in more than four years that credit lines increased, reaching $163 billion.

http://www.insidearm.com/daily/credit-card-accounts-receivable/credit-card-receivables/is-the-sub-pr...

*** Remember the Tallyman because he sure remembers you ***
Established Contributor
jimbo831
Posts: 977
Registered: ‎02-08-2012
0

Re: Is the Sub-prime Market Growing? (article)


pipeguy wrote:
  • Bank credit cards: Lending to sub-prime consumers showed a 41 percent increase from 2010 to 2011 as sub-prime borrowing hit a four-year high in December 2011 with 1.1 million new bank credit cards issued. New sub-prime card limits grew 55 percent from 2010 to 2011. At $12.5 billion in 2011, bank card limits are at their highest level since 2008 ($27.4 billion). Bank credit card growth continues, but is still well below pre-recession levels. In 2011 39.9 million bankcards were opened, an 18 percent increase from 2010 and the highest total since 2008. The increase in total bank credit card originations was accompanied by a 31 percent rise in total credit limits from 2010 to 2011. They year 2011 marked the first time in more than four years that credit lines increased, reaching $163 billion.

http://www.insidearm.com/daily/credit-card-accounts-receivable/credit-card-receivables/is-the-sub-pr...



This is scary.  Subprime lending already killed everything a few years ago and the banks jump right into it again.

Gardening with: PSECU Combo $1k, Chase Freedom $3.5k, Discover It $1.7k, Amex Costco True Earnings $2k, Capital One Platinum $500, Best Buy Store Card $2.7k

Starting Score: FICO: 587 EX, 594 EQ, 632 TU, 2/15/12; USAA FAKO: 525 EX, 541 EQ, 525 TU, 2/15/12
Current Score: FICO: 678 EX, 629 EQ, 658 TU, 3/27/12; USAA FAKO: 721 EX, 721 EQ, 576 TU, 3/9/12
Goal Score: 700 Across the Board and Amex Zync or Costco By The End Of 2012


Take the FICO Fitness Challenge
Established Contributor
pipeguy
Posts: 716
Registered: ‎10-31-2011
0

Re: Is the Sub-prime Market Growing? (article)

For CCC's I'd say the sub-prime market is very profitable. Low limits that top out at $1000 or so, most in the $300-$500 range, higher APR's 20-25% on average. So very little exposure, much higher APR's - doesn't surprise me at all that the banks like low hanging fruit. It's not exactly like a liar loan to a maid and gardener for $500,000 with no documentation.

 

Now, the sub-sub-prime like First Premier or Credit One, they deserve what they get (the issuers) IMO.

*** Remember the Tallyman because he sure remembers you ***
Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007
0

Re: Is the Sub-prime Market Growing? (article)

Capitol 1 has been giving people mutilple low CL accounts for years so they could drive up OTL and yearly fees.  I see more banks doing this to generate income taken away by the recent credit card act and pushback from users on debit card fees.

09/12/2013 FICO: EQ: 772 EX:813 TU:752
Established Contributor
pakman92
Posts: 650
Registered: ‎03-01-2012
0

Re: Is the Sub-prime Market Growing? (article)


jimbo831 wrote:

pipeguy wrote:
  • Bank credit cards: Lending to sub-prime consumers showed a 41 percent increase from 2010 to 2011 as sub-prime borrowing hit a four-year high in December 2011 with 1.1 million new bank credit cards issued. New sub-prime card limits grew 55 percent from 2010 to 2011. At $12.5 billion in 2011, bank card limits are at their highest level since 2008 ($27.4 billion). Bank credit card growth continues, but is still well below pre-recession levels. In 2011 39.9 million bankcards were opened, an 18 percent increase from 2010 and the highest total since 2008. The increase in total bank credit card originations was accompanied by a 31 percent rise in total credit limits from 2010 to 2011. They year 2011 marked the first time in more than four years that credit lines increased, reaching $163 billion.

http://www.insidearm.com/daily/credit-card-accounts-receivable/credit-card-receivables/is-the-sub-pr...



This is scary.  Subprime lending already killed everything a few years ago and the banks jump right into it again.


With regards to anything being 'scary.'  I think this is different than subprime mortage lending.  With subprime mortagage lending that brough the world down, there was a bad assumption on the part of the banks that housing value would never collapse.

 

With subprime credit card issuing, it's no different than 'pay day loans.'   high APR and AF's pays for the risk.  They are basically screwing the vulnerable.


My Starting Score: EQ: 691 (11/30/11) TU98: 726 (11/30/11)
My Current Score: EQ: 779 (04/22/13) TU08: 835 (06/03/13)
DW Starting Score: EQ: 742 (03/02/12) TU98: 748 (03/02/12)
DW Current Score: EQ: 784 (03/11/13) TU08: 775 (06/03/13)
Moderator
Revelate
Posts: 9,477
Registered: ‎12-30-2011
0

Re: Is the Sub-prime Market Growing? (article)


pakman92 wrote:

jimbo831 wrote:

pipeguy wrote:
  • Bank credit cards: Lending to sub-prime consumers showed a 41 percent increase from 2010 to 2011 as sub-prime borrowing hit a four-year high in December 2011 with 1.1 million new bank credit cards issued. New sub-prime card limits grew 55 percent from 2010 to 2011. At $12.5 billion in 2011, bank card limits are at their highest level since 2008 ($27.4 billion). Bank credit card growth continues, but is still well below pre-recession levels. In 2011 39.9 million bankcards were opened, an 18 percent increase from 2010 and the highest total since 2008. The increase in total bank credit card originations was accompanied by a 31 percent rise in total credit limits from 2010 to 2011. They year 2011 marked the first time in more than four years that credit lines increased, reaching $163 billion.

http://www.insidearm.com/daily/credit-card-accounts-receivable/credit-card-receivables/is-the-sub-pr...



This is scary.  Subprime lending already killed everything a few years ago and the banks jump right into it again.


With regards to anything being 'scary.'  I think this is different than subprime mortage lending.  With subprime mortagage lending that brough the world down, there was a bad assumption on the part of the banks that housing value would never collapse.

 

With subprime credit card issuing, it's no different than 'pay day loans.'   high APR and AF's pays for the risk.  They are basically screwing the vulnerable.


Even the worst of the sub-prime credit cards I've seen posted, are nowhere close to the PDL (pay day loan) racket.  

 

When you're subprime, you take what you can get.  Sure, some credit products are better than others, but the fact is at least people are starting to lend down to the unwashed masses such as myself, and getting it reported to the bureaus.  That's the only way to drag onself out of the muck, thank Christ subprime lending is alive and well.

 

That's the purely altruistic side, which I can assure you none of the lenders care about.  Bottom line, there's lots of money to be made in various subprime products, and most lenders want a slice of the pie.

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 673, EQ 8 707, TU 720, EX 702* (09/02/14, EX older)
Goal Score: 700 on EQ '04 (01/01/15)


Take the myFICO Fitness Challenge
Established Contributor
pipeguy
Posts: 716
Registered: ‎10-31-2011
0

Re: Is the Sub-prime Market Growing? (article)

[ Edited ]

pakman92 wrote:

jimbo831 wrote:

  This is scary.  Subprime lending already killed everything a few years ago and the banks jump right into it again.
With regards to anything being 'scary.'  I think this is different than subprime mortage lending.  With subprime mortagage lending that brough the world down, there was a bad assumption on the part of the banks that housing value would never collapse.

 

With subprime credit card issuing, it's no different than 'pay day loans.'   high APR and AF's pays for the risk.  They are basically screwing the vulnerable.


Seriously? You are equating Capital One and Orchard sub-prime "rebuilders" with Pay Day loans? AmEx with a $25 AF and a $200 hard linit, $500 CL Citi with a $59 AF anda $24.99 APR ?  These might be rebuilders, but they are nothing like Pay Day Loans IMO.

*** Remember the Tallyman because he sure remembers you ***
Senior Contributor
drkaje
Posts: 3,492
Registered: ‎07-25-2008
0

Re: Is the Sub-prime Market Growing? (article)

Perhaps credit card companies are hoping for a bailout once they're "too big to fail".:smileyhappy:


Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO


Take the FICO Fitness Challenge
Frequent Contributor
Roarmeister
Posts: 331
Registered: ‎04-21-2012
0

Re: Is the Sub-prime Market Growing? (article)

I think the reason for the increase in the sub-prime credit is because the banks have gotten their bail out and their profits have gone back up.  There is still money to be made by going after these toxic creditors so they decided to get back into the water.  Banks are predators.

AMEX_PlatinumBMOWorldMCCapOnePlatinumMBNA_Platinum+ScotiaMomentum
____$25k_______$20k_______$20k_______$25k_______$25k____
Starting Score: 676 Feb 2008; Current Score: 788 EQ, 814 TU, October 2014; Goal Score: 800 by end of year Oldest Account reported by EQ: 12 years; EQ AAoA: 5.6 years; EQ Credit Utilization: 3.5%
Super Contributor
marty56
Posts: 5,679
Registered: ‎10-06-2007
0

Re: Is the Sub-prime Market Growing? (article)


Roarmeister wrote:

I think the reason for the increase in the sub-prime credit is because the banks have gotten their bail out and their profits have gone back up.  There is still money to be made by going after these toxic creditors so they decided to get back into the water.  Banks are predators.


Banks like BofA and Capitol 1 perhaps. Just another reason why CU's rule.

 


 

09/12/2013 FICO: EQ: 772 EX:813 TU:752

myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}