According to Equifax, new subprime cards issued in H1 2011 are up 64 percent from H1 2010. However, this growth in issuing is only about one-third of the production that was seen in 2007. The growth in subprime issuing is to be expected. Issuers’ delinquencies and charge-offs have improved dramatically since spiking early in 2010, and they have begun developing strategies to grow their account bases.
The article notes that issuers pursuing these segments include Citigroup and Capital One (in combination with its planned acquisition of HSBC’s U.S. card business). Data from Synovate show these organizations to be among more prolific mailers to subprime consumer segments.
Mercator’s CustomerMonitor Survey Series data from 2011 indicate that consumers are still cautious in applying for and spending on credit cards. Consumers with stronger credit histories are typically more than twice as likely as higher risk consumers to note they are using credit cards more, while non-prime consumers are more likely to say they are trying to limit their use of credit cards.
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