ATLANTA (11/12/14)--Subprime borrowers currently top the list for growth of new credit for cards issued by both financial institutions and retailers, according to Equifax in its latest National Consumer Credit Trends report.
Annually, financial institution-issued card limits for subprime borrowers have climbed 43.5% up to $12.68 billion, which is a six-year high, while the number of cards issued has jumped 42.9%.
Retail-issued card limits have increased 16.2% to $6.87 billion year-over-year, and the number of cards rose by 12.8%.
"As the economy improves, consumers appear to be ready to expand, or in some cases rebuild their credit," said Amy Crews Cutts, Equifax senior vice president/chief economist. "New credit card accounts for those consumers with a subprime credit score have shown more than a 40% increase to date this year over the same time last year.
"This reflects both consumers' appetite for new credit, and lenders' willingness to offer it. Interestingly, balances for both subprime and prime have risen very little, suggesting that while consumers are positioning themselves for growth, they are also hesitant to take on new debt."
Added Brad Jones, Equifax retail banking leader: "As consumers continue to become less credit averse, financial institutions are in a different position than in the past five to six years. Those organizations that use best-in-class data to gain a true understanding of consumer trajectory will not only know where a customer is, but where they are headed, for more informed decisioning and targeting."
Additional highlights from the report: