Number of new credit card accounts rises in 2011
Subprime sector leads growth
The number of new credit card accounts originating in 2011 outpaced that of 2010, Equifax said in a recent report.
According to Equifax, 39.9 million bank credit cards were opened, which represents an 18% increase from 2010 and is also the highest total amount of new bank credit card accounts since 2008.
The increase in new accounts is a result of increasing demand for new credit cards from consumers and also a more aggressive approach by banks and lenders to acquire new credit card customers, Equifax said.
Credit card lending to subprime consumers in December 2011 hit the highest level in four years with 1.1 million new bank credit cards issued. This is a 41% increase year over year.
“The evidence of increased lending to sub-prime consumers demonstrates banks’ ongoing efforts to grow lending by providing credit opportunities to more consumers,” Amy Crews Cutts, Equifax Chief Economist, said in a statement. “Year-over-year results show borrowers are taking advantage of the new opportunities and seeking to diversify their financial activity, which is building momentum toward economic improvement.”
Credit limits show increases
Consumer credit limits for bank credit cards also experienced overall increases from December 2010 to December 2011, reaching $163 billion.
In total, credit limits of bank credit cards increased 31% from 2010 to 2011. The year-over-year increase marked the first time in more than four years that bank credit card credit lines increased, Equifax said.