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September 06, 2007
Sub-Prime Credit Cards Still Issued
With the sub-prime mortgage crisis in full swing, banks are truly on the attack to get every last nickel from those in immense emotional anguish.
According to Mintel International Group, a consumer research firm, direct mail card offers are being aggressively sent to sub-prime consumers. A spike of 41% in fact in direct mailings to get the sub-prime market signed on for credit card offers.
While this might not make sense to most people when there is a major mortgage crisis with sub-prime mortgage holders I am going to explain what’s happening.
If somebody with less than perfect credit where to apply for a mortgage they would almost certainly be rejected because banks are not inclined to lend to this market because of the high risk and falling housing prices. In June of this year one in five sub-prime mortgages were 60 in arrears and 1 in were in foreclosure.
It is frightening statistics such as mentioned above that create a fear within the banks of lending to those with a poor credit history.
However, banks are still very interested in making money from the sub-prime market so they are extending credit card offers to those who are desperate for credit. It’s the only form of credit being issued right now to people with poor credit.
It’s sad to see that the banks are not working to individually resolve some of the mortgage woes and that they are aggressively hammering out credit card offers but I guess that’s just the way business works!
A word of advice to you if you are one of those people with bad credit, if you looking to apply for credit cards please use your card with the greatest respect. A credit card is a fantastic tool for repairing your credit score however you must use common sense when making purchases and learn from those who are suffering in a state of bankruptcy right now.
Use your credit card to restore your credit because if it’s not used with wisdom your credit will erode even further.
Remember the best credit card deals are had by those with excellent credit and I challenge you to get yourself to that wonderful place!
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