According to some financial analysts, we’re in for some rough times in 2008 – particularly when it comes to credit cards. In fact, I read an article from one analyst who believes consumers are going to find it difficult to to get new credit cards AT ALL because of the tighter lending criteria for new card holders by card issuers. This tightening, according to the analyst, is in response to the mounting consumer debt and increase in likelihood on loan defaults and bankruptcy filings.
I don’t disagree that there are plenty of people out there that rely on their credit cards in an unhealthy way. Of course, whether they are just “getting by” with their credit cards or they’re simply living beyond their means is a subject for another debate. Nonetheless, I don’t envision credit card companies relaxing their marketing efforts, now or any time in the futre.
The reality is that competition in the industry has never been more intense and card issuers are trying as hard as ever to win over new customers with newer, better card offerings. In an effort to attract new cardholders, it’s becoming increasingly rare to find a card that doesn’t offer some sort of rewards program or other perk to entice new customers. Sure, there will be plenty more customers who end up defaulting, but there will be no shortage in demand for these new card offerings.
If the credit card companies do start to feel the pinch from card holder defaults and bankruptcy filings, they will likely just pass these costs on to their merchants and card holders in the form of higher fees and more expensive finance charges.
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