New subprime accounts, driven by millennials, power growth
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The wave of growth in credit card accounts continued in the first quarter of 2015, up 14 percent over the previous year period. The total of 314 million accounts is the largest since late 2008, when the recession led issuers to slow the credit fire hose to a trickle.
There was growth in all categories (subprime, prime and super-prime), the American Bankers Association’s September 2015 Credit Card Market Monitor found, but that was fueled by a 28 percent increase in new subprime accounts. For the first time in three years, the total number of subprime accounts reached 60 million.
As the economy improves, banks are opening the door “for millennials with no credit history as well as those who have had difficulty managing credit in the past,” said James Chessen, ABA’s chief economist.
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