U.S. consumer borrowing unexpectedly fell in August as credit card balances declined for a sixth consecutive month with the coronavirus pandemic continuing to limit some purchases amid elevated unemployment.
The company, which provides credit cards to millennials, is expanding its target audience beyond thin-file consumers and those without credit histories. It will now also target those with blemished, nonprime credit histories.
The industry saw small gains in many loan categories during the second quarter, but credit cards declined. A new study from WalletHub shows the biggest quarterly drop in credit card balances in over 30 years.
Capital One Financial is reining in credit lines to reduce its exposure while the nation’s largest card issuer, JPMorgan Chase, is rolling out a new card designed for travelers and diners.
Visa and JPMorgan Chase & Co. are in the middle of a 10-year merchant services agreement that gives Chase merchants certain advantages with the expected goal of favoring Visa card volume. But it’s not an exclusive arrangement.
Some customers have complained of limits being slashed by one-third to two-thirds, eroding their ability to borrow in an emergency during a pandemic or potentially hurting their credit scores.
Even as the bank’s sales practices faced intense government scrutiny following the Wells Fargo scandal, senior leaders in Oregon were fostering a culture that valued credit-card sales above all else, according to several former employees.
