Study: Credit Card Issuers Target Heaviest Users

Credit card issuers continue to concentrate on those households considered to be at high risk, according to a recent study from global market research company Synovate.

The study found that during the third quarter of this year, about 363 million of 1.29 billion card offers were sent to high-risk households, defined as those using more than 30% of their available credit. During the second quarter, of 1.27 billion card offers, 347 million were sent to these households.

"This study offers more evidence that some credit card issuers are continuing to target these high risk households," says Travis Plunkett, legislative director of the Consumer Federation of America. "Because many families can't tap into home equity anymore, and the ability to refinance is not there, some issuers have targeted them more and more knowing families have nowhere else to turn. ... These families are on a debt treadmill and while they don't necessarily fall off, they never fully catch up either."

Plunkett says that these "ultra utilization" users are profitable for credit card issuers in the short term because the companies can charge these families higher interest rates, and that these households are also more likely to be hit with fees, as they pay late or go over their credit limit.

Ken Clayton, managing director and general counsel at the American Bankers Association disagrees, however, saying that card companies prefer responsible consumers. "Credit card companies don't make money if credit card users don't pay their bills."