Investor Glossary-subprime credit cardInvestor Glossary-subprime credit cardInvestor Glossary-subprime credit cardInvestor Glossary-subprime credit cardInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Subprime Credit Card

The HTML to link to this page
 

A subprime credit card is a credit card designed for people with bad credit or who have yet to establish a credit history. Many major credit issuers as well as smaller financial institutions offer a subprime credit card. The subprime credit card traditionally carries higher fees and or higher interest rates which make up for the increased risk involved in such lending. Interest rates on a subprime credit card can start around 10% but can run 30% or higher. A subprime credit card can carry terms of agreement which will cause the interest rate to increase dramatically if a payment is late or the card holder exceeds his or her limit. In some situations, a subprime credit card may help a consumer improve poor credit scores. Most subprime credit card companies report to major credit reporting agencies such as TransUnion, Experian and Equifax.

After the loosening of lending regulations in the 1990's credit card companies in the United States began offering their subprime credit card to borrowers, but by 2002, as the U.S. economy slowed, many issuers saw increased default rates from subprime credit card holders and were forced to close their doors. In 2007, a new generation of subprime credit card began to appear on the market. As more of these vendors emerged, the market for subprime credit card industry became more competitive, forcing lenders to make their cards more attractive by lowering interest rates.



Rate this Subprime Credit Card definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, balance sheet, VIX, implied volatility, current ratio, reverse mortgage, risk management, minority interest, option premium, inflation, EBITDA, average price per share, ex-dividend date, annual return, 144a, wholly-owned subsidiary, irrevocable trust, Key Rate Duration, APR, stock split, debt service coverage, deferred tax, 1031 exchange, LIBOR, real GDP, Zero Cost Collar, liquidity ratio, 1035 exchange, FTSE, phantom income, covered put, in escrow, stock market close, per diem, margin rate, open position, quality assurance, dividends payable, deferred revenue, required rate of return, FICO score, retained earnings, diluted share, 401a, class C shares, ex-dividend, command economy, limit order, cancelled check


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use