Tight credit market? Absolutely! And it's not only the business community that's at a loss for capital to fund expansion, acquisitions, and the like. Individual consumers are feeling the squeeze too, and not just for mortgage loans.
Credit card issuers are fretting the potential losses from consumers forced into bankruptcy by the slumping economy. And to protect themselves, they're being much more discriminating in whom they issue cards to, and even which accounts they choose to maintain.
Epitomizing that focus on risk management, American Express has been quietly paying some of its riskier cardholders $300 to relinquish their cards and close their accounts.
Perhaps the most visible sign of the credit card companies' new conservatism, however, is the sudden let-up in the torrent of junk mail touting every imaginable flavor of credit card.
But while consumers' mailboxes may be emptier, a quick survey of airline websites shows that there's no shortage of generous mileage bonuses on offer for consumers who apply for frequent flyer program-affiliated credit cards.
Sign up for any of the several cards linked to American's AAdvantage program, for example, and you'll be rewarded with 25,000 bonus miles after charging $750 during the first four months. That's an easy target, and a bonus that belies the harsh economic climate.
The bonus for new United Mileage Plus Visa cardholders is even richer: 30,000 bonus miles after just $250 in charges to the card.
Because they tend to have high household incomes—which means they spend often and default rarely—frequent flyers have always been desirable credit card customers. Apparently that combination of characteristics is more desirable today than ever.