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Credit Card Companies Are Again Going After Customers With Less Than Excellent Credit Scores

Not surprisingly, after having to deal with a record number of defaults, credit card issuers all but abandoned anyone with a less than an excellent credit rating. After issuing cards to just about anyone, the providers got burned badly when the economy began to falter.

balance transfer credit cardsIt was inevitable really. People with poor credit histories earn that distinction by failing to live up to their financial responsibilities. But an interesting thing happened. The cardholders with excellent credit ratings are not carrying balances like they use to.

They are, in fact, paying their monthly statements off in full. And that’s cutting into the profits of the credit card providers. After all, it’s the interest rates where they make the bulk of their profits. Oh sure, fees and penalties are plenty lucrative, but interest is still king.

Generally speaking, a credit score over 700 is considered to be very good or excellent. Credit scores are kept by credit agencies and here in the United States the main ones are Equifax, Experian and Transunion. Incidentally, a perfect score is 850 (and impossible to get I’m told) and anything below 620 is considered to be low.

Data shows that less credit cards are going out to people with excellent credit ratings while more are going out to people with scores under 700. In order to make up for lost business the credit card companies are basically forced to go after more risky clientele.

Transunion reported that at the end of the third quarter of 2011, over 25% of new cards were issued to consumers with credit scores below 700. That translates into about a quarter of a million cards. That’s up 24% from 2010.

So it’s basically good news for those folks that have found it difficult to get credit in recent years. It appears that credit card companies, with the worst of the credit crises behind them, are doing what they need to do to continue to grow.

And they also continue to sweeten the deal for consumers with excellent credit by offering more attractive rewards programs.

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