Banks Are Making It Easier to Get Credit Cards
Lenders are again welcoming borrowers with less-than-pristine credit, a vote of confidence in the health of the U.S. economy and Americans’ finances. An estimated 29.2 million general-purpose credit cards were issued to people with credit scores of 660 and below last year, according to TransUnion, up from 20.4 million in 2020 and 26.3 million in 2019. That is generally the threshold where lenders view consumers as having fair, rather than good, credit. Even subprime borrowers, a group shunned during the pandemic, are finding it easier to get credit.
U.S. November Consumer Borrowing Marked Largest Gain in 20 Years
U.S. consumer credit soared by $40 billion in November, more than double expectations and compared with a $16 billion gain in October, according to Federal Reserve data released Friday. That translated into an 11% annual gain, the largest move in a single month in 20 years. Revolving credit, such as credit cards, rose at a 23.4% rate after a 7.8% gain in October. That’s the highest rate since April 1998. Total revolving credit is still below its pre-Covid peak. The jump may reflect households using credit more freely.
Credit Bureaus Now in the Crosshairs of the CFPB
The “Big Three” credit bureaus—Equifax, Experian and TransUnion—have seen a significant rise in the number of complaints lodged against them with the CFPB. The CFPB reported that in 2020, more than 50% of complaints received involved credit reporting, and that percentage increased to 60% in 2021. The most common complaint is that credit bureaus are making heavy use of “template responses” to close complaints. This has enabled the credit bureaus to reduce their average processing time while fewer consumers are receiving tailored answers to their specific problems.
Cryptocurrency is Suddenly Everywhere Except in the Cash Register
Nearly 30,000 bitcoin ATMs now dot the American landscape in gas stations, liquor stores and hair salons, up from 1,800 four years ago. About half of Coinstar’s 17,000 kiosks, which convert coins into cash, now sell bitcoin. And consumers have a growing array of options for buying, selling and transmitting the digital currency, including popular payment apps such as Venmo and Cash App. But for all the hype, there’s scant evidence that digital currencies stand on the threshold of some kind of mainstream breakthrough. While a recent Pew Research Center survey found that 16 percent of Americans have used cryptocurrency in some way, most buy it as a speculative investment, not for its originally intended purpose: as a way to pay for goods and services…ReadMore…
