13 May, 2021

Large U.S. banks poised to loosen requirements to get credit cards

Banks are looking to share data about customers in order to issue them credit cards. While good for some people who need credit cards and are responsible this is likely to open the floodgates to easy credit for people who maybe should not have it. It reminds me of relaxed mortgage requirements from 2005 through the 2008 housing bubble where anyone with a check stub could get a mortgage and buy a home. This resulted in massive defaults when the economy took a dive and spread to cause a world wide recession.

Some of the largest U.S. banks plan to start sharing data on customers’ deposit accounts as part of a government-backed initiative to extend credit to people who have traditionally lacked opportunities to borrow.

JPMorgan Chase & Co., Wells Fargo & Co., U.S. Bancorp and others will factor in information from applicants’ checking or savings accounts at other financial institutions to increase their chances of being approved for credit cards, according to people familiar with the matter. The pilot program is expected to launch this year.

It is aimed at individuals who don’t have credit scores but who are financially responsible. The banks would consider applicants’ account balances over time and their overdraft histories, the people said.

Wall Street Journal
Image by TheDigitalWay from Pixabay
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About : Kevin Bae

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