Number of new cards soars, but credit limits tight
Survey finds subprime borrowers regaining access to credit
The number of open credit cards hit a new high in the second quarter of 2015, with subprime accounts showing the strongest new card growth. Yet as lenders reach out to more subprime borrowers, they're throttling back the credit limits.
At 318 million accounts, there haven't been this many open cards since late 2008, according to the American Bankers Association's quarterly credit card report. Across all borrowers, almost 77 million new cards were issued, an increase of 16 percent over the previous year. The survey defined "new" as cards issued in the past two years.
New subprime accounts grew twice as fast, increasing 32 percent in the 12-month period. But while lenders have been granting credit to greater numbers of subprime borrowers -- climbing in each of the last four reported quarters -- the credit limits extended on these accounts have on average shrunk slightly from a year ago.
It's not an across-the-board trend. In stark contrast, credit limits for new prime and super-prime accounts have increased for five quarters in a row. The average credit line for new customers with the best credit stands at $9,060. New cards issued to subprime customers get only a fraction of that to spend -- $2,330 on average.
The December 2015 Credit Card Market Monitor is based on data from this year's second quarter, collected by Argus Information Services LLC for the American Bankers Association. It was released Dec. 2.
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