From: American Banker
Credit card companies have increased their targeting of customers with poor financial histories, many of whom may be defaulting on their subprime loans, according to the market research firm Mintel International Group.
Direct mail credit card offers to subprime customers in the United States rose 41% in the first half of this year compared with the first half of 2006, while direct mail to customers with the best credit dropped more than 13%, The Boston Globe reported, citing Mintel.
The crisis in the housing and mortgage markets has left many subprime borrowers unable to pay their bills or refinance their homes for cash, and many have been forced to use credit cards, according to Julie Lizer, Mintel’s manager of custom research.
Travis Plunkett, the legislative director of the Consumer Federation of America, said some card issuers "are engaging in risky, irresponsible lending to vulnerable consumers."