Low credit limit rules
More and more credit cards with a low debt limit appear in the hands of bank customers. In my opinion, credit cards are a lure for debtors like a mermaid on sailors.
However, what influences the fact that cards with a low limit are popular?
Has 500+ affected the credit card market?
In 2019, there was an increase in demand for low-limit credit cards (from $ 1,000 to $ 3,500). According to analysts from the Credit Information Bureau, the increased financial standing of people with lower incomes has a large impact on the increased interest in such cards. And the numbers speak for themselves.
According to the news that we can read in the new BIK credit newsletter, in April 2019 alone, banks issued 107.8 thousand to their clients. pieces of credit cards amounting to $ 595 million of the total amount of the granted debt limit. Compared to the data from the previous year, an increase of 29.3% was recorded in terms of the number of cards issued, and in value terms, it is an increase of 27.9%.
Considering that in the first four months of this year the largest number of credit cards granted were those with a limit of 1-2 thousand dollars (48.4% – 43.6%) and cards in the range from 2 to 3.5 thousand dollars (36.8% and 35.2%), such growth dynamics can be explained by the improvement in the financial situation of people with lower earnings. It is not excluded that the reason for such improvement may be the 500+ program, which confirms in his speech prof. Roger Rogue from BIK.
Low credit limits, but not only
As the expert noted, not only for cards with a small credit limit, demand increased in 2019. The second highest dynamics in terms of value was recorded for cards with high-value limits, ie those above 10,000 dollars. Comparing the results from April 2018 to April 2019, this increase was 40.6%.
Looking at the results of the SureNews report, the last months of 2018 have already shown that the credit card market is beginning to flourish. Over 75,000 arrived in the last quarter of 2018. credit cards and the trend has been growing ever since. In the previous quarters, a decrease was mainly observed.
Low credit limit on the card versus payday loans
Recovery of lost land can be done through product “substitution”, ie replacing the monthly loan with a low-limit credit card.
Such an “inverted” client in a situation of urgent financial need, instead of going for a payday loan, will use a credit card. And if he has to pay back the payday loan after a month, he can’t credit card. It is enough to cover the so-called minimum amount to be repaid by credit card (approx. 5% of the limit)
Is a card with a low limit more expensive or cheaper than payday pay?
There is no definite answer to this question. Both products belong to the group of the most expensive ones. Apart from promotions that can be found both on credit cards (low limit is not an obstacle here) and on payday loans (there are free non-bank loans, ie payday loans at 0%)