Equifax: Subprime Bankcard Borrowing Hits 4-Year High

Bankcard lending to consumers with poor credit histories showed a 41 percent increase from 2010 to 2011, as subprime borrowing hit a four-year high in Dec. 2011 with 1.1 million new bank credit cards issued.
New subprime card limits grew 55 percent from 2010 to 2011, according to Equifax’s March National Consumer Credit Trends Report and CreditForecast.com, a joint product of Equifax and Moody’s Analytics.
“The evidence of increased lending to subprime consumers demonstrates banks’ ongoing efforts to grow lending by providing credit opportunities to more consumers,” said Equifax Chief Economist Amy Crews Cutts.
At $12.5 billion in 2011, bankcard 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, as lenders more aggressively sought new customers and consumers increased their demand for new credit.
New credit in 2011 ($782 billion) remained below pre-recession levels, but gained more than 10 percent over 2009 and 2010 levels ($695 and $709 billion, respectively).
Increases in credit limits were also seen in 2011, as total retail credit card limits increased 6 percent year-over-year from December 2010 to December 2011. Total bank credit card limits jumped 24 percent from Dec. 2010 to Dec. 2011.
Consumer finance credit limits also saw a modest improvement of $1.2 billion, from December 2010 to December 2011.

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