One of the larger double whammies of the global economic meltdown of the late 2000s was the across the board hit taken to credit scores by many Americans and the subsequent tightening of credit in the wake of the crisis.
Not only did Americans experience, on a large scale, difficulty keeping current with bills and mortgages after the vast job losses, but as FICO scores dropped, credit tightened in the wake of the collapse. And we’ve all watched the economy struggle to get back on track as wages remain low and jobs scarce- with many Americans saddled with damaged credit scores and extremely limited access to credit, mortgages and auto loans.
However, in recent quarters, bad credit credit card offerings are on the rise, giving borrowers who have been caught up in the financial crisis more options in a down economy. But as always, the terms offered are not as favorable as those offered to borrowers who maintained intact credit scores throughout the crisis.
Credit card analyst Beverly Harzog spoke to CNN, saying in the current climate, banks had no choice but to begin offering credit cards to borrowers with dinged credit:
“Just a year ago, it was much more difficult for someone with average or low credit to get credit cards,. But now the economy has been getting a little better, issuers are feeling more comfortable, and in order to increase revenue, banks are realizing they need to expand their customer base.”
APR on credit cards offered to borrowers with poor credit averages at about 20%, compared to 13% for those with good or excellent FICO scores.