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Credit card lenders resume practice of preapproved offers
By Marvin Milner on Dec 13th, 2010
Many lenders are now stuffing consumers' mailboxes with preapproved credit card offers, a practice not seen in the industry in the last three years, according to a report from the New York Times. However, while these offers have even been sent to consumers who may have been rejected for similar accounts as recently as six months ago, banks are still trying to mitigate risk. This has largely been accomplished by increasing interest rates on credit card debt and reintroducing long-absent annual fees.
According to one financial consultancy firm, lenders have lost $189 billion to defaulted credit card debt since the beginning of the financial crisis in 2007, and more or less stopped extending offers for new accounts altogether except to only the wealthiest consumers.
Many Americans have redoubled efforts to reduce their debt on these accounts in recent months, leading to significant declines in the amount of consumer credit nationwide.
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