Good credit? Bad credit? It hasn't mattered much these days when it comes to credit cards now that the financial crisis and recession are far behind us.
We're looking at the greatest number of credit-card carrying consumers since 2005, according to a recently released TransUnion report.
More than 171 million consumers had access to a credit card at the end of the first quarter-the highest level in 12 years, according to TransUnion.
Nearly 22 million additional consumers were able to pull out plastic early this year compared with 2010.
The rebound in credit card access-and credit card debt-has been fueled, in part, by lenders easing credit to higher-risk consumers now that the economy and jobs picture have improved.
It has been quite a shift.
Credit card balances increased to $779 billion in the fourth quarter last year, up by $32 billion or 4.3 percent from the third quarter last year, according to the Federal Reserve Bank of New York. Aggregate credit card limits went up 2.3 percent-the 16th consecutive quarter for increases in credit card limits.
The peak for credit card balances was $866 billion in the fourth quarter of 2008.
Credit cards for subprime borrowers experienced the fastest rate of growth of any group in the last two years, said Paul Siegfried, senior vice president and credit card business leader for TransUnion.
About 16.33 million consumers who have a credit card are in the subprime risk tier-defined as a score of 600 or less using the VantageScore 3.0 risk model. That's up 2.32 million consumers since the first quarter of 2015.
The rate of growth for subprime consumers was 8.9 percent in the first quarter of 2017-a much faster clip than other risk tiers.
"As the economy gets better, the standards get lowered a bit," said Bill Hardekopf, CEO of LowCards.com.
Roughly half of subprime borrowers had a credit card last summer. That compares with 60 percent of subprime consumers in 2007 before the financial crisis hit, according to an August 2016 report based on the latest data from the Federal Reserve Bank of New York. The subprime consumer for this research is defined as having an Equifax credit score of less than 620.
Experts warn that some credit card issuers could pull back and once again tighten credit standards for those with bad credit, as default rates and delinquencies have crept up.
Consumers-including those with less-than-pristine credit-should consider three credit card tips:
SOME CREDIT CARDS
WON'T FIT IN YOUR WALLET
We're spotting all sorts of TV ads pitching the perks that come with some credit cards, but many heavily advertised cards are available only to consumers with good or excellent credit scores.
Actress Jennifer Garner and her dad can be as excited as they want about the Capital One Venture card, but you're not going to qualify for that card if you've got a 640 credit score or lower.
"If you have fair credit, don't apply for a card that requires excellent credit," Hardekopf said.
Fair credit is generally described as a credit score in the mid-to-high 600 range. It's possible to do research online at sites such as Lowcards.com and Bankrate.com for credit cards that can apply to consumers with similar credit scores.
The interest rate on cards for subprime consumers and those with fair credit will be higher-possibly in the high teens to 25 percent.
Some options for those with less than perfect credit: The Capital One QuicksilverOne card, Chase Slate, and Discover it Cashback Match.
Remember: Applying for too many credit cards at once can contribute to a drop in your credit score because it can look like you're in some sort of financial jam.
CREDIT LINES MIGHT NOT
BE AS RICH AS YOU'D LIKE
While credit card issuers are making plastic available, how much you can charge on those cards can be limited.
The average line of credit for a subprime consumer-someone with a VantageScore of 600 or less-is down by $1,069 compared with the first quarter of 2010, according to TransUnion.
By contrast, a consumer at the opposite end of the credit risk spectrum is seeing a higher available line of credit. Someone who has super prime credit-defined as 781 or higher-would see an average credit line that is up by $4,195 since early 2010, according to TransUnion.
"Credit card issuers are deliberately managing their risk," said Siegfried of TransUnion.
An individual's line of credit can be cut if the consumer shows signs of financial distress.
Experts say the credit card industry recognizes that subprime consumers often use credit cards because they already have some financial difficulties.
"For subprime, they're always in a recession," Siegfried said.
UNFAVORABLE TERMS? JUST DON'T BORROW
If you get fewer hours at work than usual-or lose a job-it becomes tougher to pay off the credit card bill in full each month. Or even make a minimum payment on time.
While many consumers are more optimistic about their economic outlook lately, the reality is that the jobless rate won't keep going down and housing prices won't keep going up indefinitely.
Some people are already experiencing greater difficulty paying their bills.
The credit card delinquency rate rose to 1.69 percent in the first quarter, based on payments that were more than 90 days late. That's up from an average of 1.51 percent for the first quarter in recent years, according to TransUnion.
Delinquency rates were expected to climb higher once credit card issuers began opening more doors for subprime borrowers beginning in 2014.
But experts still are keeping a watchful eye on reports from issuers-such as Capital One, Synchrony Financial and Discover Financial Services-about higher loan losses lately relating to the credit card business.
For consumers, the best bet may be to move cautiously when it comes to credit.
"Refrain from borrowing if you have to do so on unfavorable terms," said Greg McBride, chief financial analyst for Bankrate.com.
"Budget, save, and allow time for your creditworthiness to improve so you can borrow at more attractive terms," he said.
That's true with credit cards, car loans and the like.
"I hear from people that get saddled with a 14 percent rate on a car loan and one year later they're struggling to keep up with the payments, aren't crazy about the car anymore, and are upside down so they are stuck," McBride said.
The credit card payment isn't the only bill in town, so it's savvy to keep the spending under control.
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