Small Business Credit Cards

Thousands Denied for Credit cards As Credit card issuers increasingly tighten standards A Report From Federal:

Yes you rode it correctly as thousands of applicants were denied who applied for credit cards many of them are aged between 25 to 30.The April 2008 survey of senior loan officers, released May 5 by the Federal Reserve, shows a threefold surge in the amount of banks acknowledging tougher credit card approval standards compared with the January survey.

In the initial three months of this year, some banks decided to minimize the risk posed by consumers with bad credit by making credit cards less available to those with poor credit scores, by lowering credit limits for sub prime borrowers and by increasing the minimum credit score required for approval. “Significant net fractions of respondents indicated that they had reduced the extent to which such loans were granted to customers who did not meet credit-scoring thresholds, reduced credit limits on credit card loans, and increased minimum required credit scores,” the survey says.

A number of experts I spoke with in March for a story on bank earnings predicted a tougher approach to credit card lending in the wake of card issuers’ bad earnings results.

Despite the tougher credit card lending standards, consumers increasingly warmed to credit in early 2008. About 20 percent of bankers said they “experienced weaker demand for consumer loans of all types over the previous three months,” according to the survey. That was an improvement over the January result, when about 35 percent reported weaker demand for borrowed money.

Either way, it’s clear that a large number of consumers in need of credit cards are being denied, which could lead to a larger number of defaults on existing credit cards.