Credit Terms Being Tightened Up By Lenders
The recent mortgage crisis has had residual effects in many areas of the economy and that includes lending practices around credit cards and loans.
Financing companies are going so far as to offer certain debtors a bounty for closing their loan obligations according to Pittsburgh’s Tribune-Review:
“National City Corp., among the financial institutions hit hardest by the mortgage mess, has begun offering credit line holders $200 for closing accounts with no balance.”
According to Michael Mooney, chief lending officer at Fidelity Bank in the Pittsburgh area, banks are starting to revert to old lending rules they used prior to the easy money era of sub prime and look for such qualifying metrics as credit record, debt-to-income ratio and good income and collateral.
LowCards.com, CEO Bill Hardekopf, says that though credit card interests rates have remained relatively flat - around 12+%, but on an individual basis, credit card companies are making it more difficult.
He told the Times-Review, “Rates are based on an individual’s credit score, so if the issuers see a score going down, it’s very likely their APR (annual percentage rate) is going up.”
September 20, 2008 – 3:03 pm