Which credit card user are you?

Banks are starting to offer more cards to customers with blemished records.

By Kim Peterson Dec 13, 2010 2:28PM
Credit cards © Hill Street Studios/Getty ImagesIt used to be so easy for credit card companies to rate their customers. People either paid the bills or they didn't, so banks offered cards to the ones who paid.

But times have changed. The mortgage crisis has created entirely new categories of credit card users. There are people who still shop and save and pay their bills -- but whose credit has been demolished by a foreclosure. There are people who should still get cards -- but traditional banking rules say they can't.

So now banking consultants are slapping new labels on borrowers in an attempt to figure out whom to offer cards to, according to The New York Times. Here they are:

The strategic defaulter. This person still makes a good living but walked away from a home when the mortgage went "underwater." This defaulter would still be a good credit card customer.

The first-time defaulter. This person would have been fine but lost a job when the economy tanked and fell behind on a loan payment. Post continues after video:
The sloppy payer.
The name says it all: This person doesn't pay every bill on time.

The abuser. This person just doesn't want to pay the bills.

The distressed borrower. This person doesn't have the money to pay the bills.

The goal, writes Eric Dash, is to weed out some customers to find out who will still pay the bills, even if their credit scores aren't spotless.

This is a very difficult line for banks to walk. They made huge money on credit cards before the recession hit, lobbying high interest rates and fees at customers. But since 2007, they have taken nearly $190 billion in credit card losses.

In crisis mode, the banks pretty much shut down credit card offers to anyone who wasn't wealthy with spectacular credit. What had been a flood of money slowed to a trickle.

Wealthy people will still get most of the 2.5 billion credit card offers sent out this year, Dash writes. But about 17% will go to borrowers with blemished credit.

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