Ever wonder what happened to preapproved credit card offers? They’re back. And just in time for the holidays. The same people who brought you never ending collection calls from the last round of easy credit have decided that you can ramp bank profits back up. Prior to the financial meltdown banks relied heavily on credit card business to high risk borrowers for profit. The letters are coming.
Who are making preapproved credit card offers, and how many??
1. Capital One 22 million
2. HSBC 16.5 million
3. Citigroup 14.1 million
4. Discover Financial 14.1 million
5. American Express 8 million
6. Chase 7.6 million
7. Bank of America 3.7 million
The letters will arrive before the New Year.
If your FICO score is below 700 you are seen as a potential sucker, I mean customer. These cards will carry higher fees and interest rates. For instance Capital One will have an interest rate of 18% with an annual fee up to $50. Hard to believe they can be higher than what you have already? The banks look at more debt as an opportunity for you to repair you damaged credit. What better way to do this than to take on more debt at a higher price you can’t pay. Nearly 2.5 billion offers are to be sent out.
Once again the banks are going to prove they are smarter than you. If you get a letter you have been identified as a consumer whose credit score is blemished but still have money to pay bills, and take collection calls.
People are working hard to get out of debt. Some have stopped using credit cards altogether. Many more that still have credit cards have been paying them down, or are choosing to use cash instead of credit. Some try credit counseling. The smarter ones file bankruptcy. The emphasis has been to get out of debt.
Why would you want to get further into debt?
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photo credit: Andres Rueda