Credit Cards Become Next Issue for Consumers
It's getting much more difficult for consumers to get credit cards, or if they have them, to maintain their limits, according to a Federal Reserve survey of lenders released on Monday.
Nearly 60 percent of respondents said they had tightened lending standards on credit card loans. About 50 percent reported raising the minimum required credit scores on credit card accounts over the past three months.
For those who have cards, maintaining favorable terms has become tougher.
About 20 percent of domestic banks reported having reduced credit limits on existing accounts to prime borrowers, who are considered more credit worthy. It was worse for subprime borrowers: About 60 percent of banks had lowered limits on those existing credit card accounts.
Curtis Arnold, founder of www.cardratings.com, which keeps track of industry trends, also said that card companies have been quicker to increase interest rates for borrowers with poor or mediocre credit. Fees have also gone up, he said.
"They're definitely feeling the pinch," he said of the credit cards. "That's why you've got this bizarre stuff going on."
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By washingtonpost.com Editor |
November 3, 2008; 7:38 PM ET
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