The total number of new credit cards issued in the U.S. rose more than 28 percent on a year-over-year in February, according to the latest statistics from the credit monitoring bureau Equifax. This was driven primarily by the number of new accounts granted to subprime borrowers, those whose credit scores were below 660. The number of these new accounts spiked 75 percent, even as credit limits on them fell.
Lenders decreased the amount subprime lenders could borrow on average to a limit of $977 in February, down from the $1,025 observed in the same month in 2010, the report said. In fact, all borrowers saw credit limits slashed, as the average new card now has a ceiling of $4,008, a decline from the previous year's $4,086.
Subprime borrowers may have lower credit scores as a result of past credit card payment troubles, but loosening standards are a sign that lenders feel debt resolution has left some borrowers in a better financial position to pay their bills.