I’ve been saying it all along through this financial crisis, as soon as the banks feel comfortable with their ability to manage their risk they will be back to extending credit again to high risk consumers. And I’ve also been saying that while consumer savings rates are high now, all it will take is credit card offers and increasing consumer confidence to lead people back into deep debt.
In a New York Times article today, more subprime offers appear to be landing in mailboxes of consumers that have been recently ignored. Credit card companies like Capital One HSBC, Citigroup and Discover have really ramped up their offer mailings.
Credit card offers are surging again after a three-year slowdown, as banks seek to revive a business that brought them huge profits before the financial crisis wrecked the credit scores of so many Americans.
Citigroup is testing a credit card with training wheels, known as CitiMax, devised for customers whose credit was damaged by the recession. Borrowers are required to link their credit card account to a checking, savings or brokerage account so that Citi can withdraw money if a payment is missed.
Read the entire article here.Credit Cards Becoming Available Again for High Risk Consumers by Steve Rhode