Default rates are not as high on CCs as they are on mortgages though.
I do not have any hard numbers to refute what you have said. However, default rates on CCs must be close because CCs are usually the first thing people stop paying if they are about to foreclose on their house or consider filing for BK. Just a thought!
You are correct BUT an article that I posted recently said that CC default rates are slightly declining while home mortgage default rates are at an all time high.
Although credit card issuers and other companies that lend to consumers have escaped the barrage of defaults that mortgage lenders have suffered, they’re nonetheless being more careful about who they lend to, and under what terms. Some card issuers are raising interest rates, while others are cutting back offers to less creditworthy customers or lowering credit limits. Personal and auto loans are also going through changes.
I think my statement in an earlier post started us on this deafult rate discussion. My point in this earlier post was to say the FICO score needed for a prime mortgage seems to be on the rise whereas it's easier now to to get your foot in door with the so-called prime CCCs.
As a general rule Amex, Discover, CITI, Chase and BoA are commonly thought of as prime. However, each of these has sub-prime offerings. Amex was the latest to test these waters and I suspect Discover will follow suit. There have been some recent posts on Discover approvals with scores in the mid to high 600's and that was unheard of a year or two ago. Strange isn't it that the mortgage and CC industries are moving in opposite directions.
I agree fused. I have seen my kid get preapps from Chase at 24% interest. Thats not even the default!!!! Any company that has 24% on a card with no bad payment history is insane. and definitely NOT prime. Even Household bank doesn't have acard that starts off with that interest rate. When a bank gets into the habit of practicing usery that is the VERY definition of subprime....
BTW my kid is only 13 but an AU on one of my accounts. He also gets Amex pre-approved offers.
