Anna Maria Andriotis

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3,396 appearances 52 recordings 1 series first heard Jul 2017 last heard Dec 2022

Anna Maria Andriotis’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Credit-Card Lenders Resume Courting Subprime Consumers · 11 Jan 2022 podcast

So profitability is something that banks are looking to increase within their credit card divisions by lending to people who have lower credit scores matched

they're able to potentially boost profitability because subprime consumers generally get assigned a higher interest rate, a higher APR than people with high credit scores do. matched

So if these people get the cards and start using them and carrying a balance month to month, matched

Those would be interest charges to the bank at a higher interest rate than what more creditworthy consumers would be paying. matched

So there's a low risk environment and a time when banks are looking to boost profitability. matched

So they're turning to people to whom they can easily charge more in interest. matched

Generally speaking, when a credit score is below 620, that is defined almost unanimously agreed upon by lenders that people below 620 are generally subprime. matched

There is sort of a higher sort of threshold where we move from somebody having good credit to being fair credit. matched

So that would be around a score of 660 once people drop below that. matched

In early 2021, the average APR on interest charging credit cards was 15.91%. matched

By August of last year, that had reached 17.13%. matched

That's a pretty sizable increase within the span of a few months. matched

And that 17.13% was almost at a record high. matched

The highest average annual APR was hit back in 2019 at 17.14. matched

So we were just shy of that at 17.13 in August of last year. matched

Interest rates in general that consumers with low credit scores receive tend to be pretty high. matched

20%, if not more, is typical. matched

So on the one hand, the positive angle to what's happening here is that lenders are making it easier for people to get access to credit, in particular people who were shut off from that access in the beginning stages of the pandemic. matched

So that certainly helps from an ability to borrow and spend standpoint. matched

However, when it comes to carrying balances, consumers who are unable to pay their credit card bills in full each month will essentially be looking at incurring interest charges matched

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