I just read that the unemployment rate is up to 5.4%. With the recent meltdowns of Providian and Nextcard do you think that credit card companies will begin tightening their belts on new applicants? Right now the easiest cards to get are airline cards - Delta issued by Amex and American issued by Citi. What about major credit cards - Blue, Chase, Juniper, Capital One, etc.? And what is going to happen to the subprime issuers? Their stock now is at an all time low and it looks like many will declare bankruptcy or sale their struggling enterprises. How will this affect us as customers - prime and subprime? Should we be paying down our balances and start using cash? Dani
Personally I don't see this happening, at least not until after the Holiday Season. Credit card companies and merchants bank waaaay tooo much on the Holiday shopping season and many approve applications rapidly and with more lenient standards during the Holidays. After the first of the year, it may be a different subject.
I think there will be strongcompetion for prime and superprime customers. Subprime consumers are going to have much fewer choices in the years to come.
Re: Tightening of credit to occur s Unfortunately I agree with you, keepmine. Aria was dissolved into Providian, which is having a meltdown. Nextcard is well into their meltdown. Both companies are looking for a buyer. Capital One is refocusing much of their marketing efforts on the prime market with their new "No Hassles Platinum Card" campaign. I don't see Capital One abandoning subprime though. It wouldn't surprise me to see Capital One buy out all of the Providian accounts ultimately. Doc
