Consumer Payment Card News

Credit Tightening?

The Federal Reserve said Friday its most recent quarterly survey of bank loan executives shows a progressive tightening of credit standards for consumer loans, especially credit card loans. About 50% of the banks participating in the survey indicate they have tightened standards for new credit card accounts since the start of this year. Four out of ten banks say they have lowered card credit limits while 15% say they have raised pricing. Among card issuers significantly adjusting pricing in response to deteriorating credit quality is Advanta. Besides raising interest rates Advanta has hiked late, overlimit and returned check fees to $25, shortened purchase grace periods to 20 days and raised cash advance fees to 4% with a $5 minimum. According to CardTrak, Advanta has also introduced a new $25 account closing fee, a $15 fee for accounts inactive for six consecutive billing cycles and a punitive interest rate of prime +15.74%

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