Banks Tighten Credit Card Lending

Consumers should see a let-up in the flood of offers for credit cards and will find it harder to qualify for plastic as banks tighten standards in an effort to reduce loan problems created by a consumer borrowing binge.

While second-quarter earnings reports showed that banks are piling up more bad credit card debt, they also revealed that banks are getting pickier about who gets their cards and taking other precautions to prevent the debt problem from getting out of hand.

A key to the rising bad debts is the lowering of standards for spreading around the plastic. Credit card issuers score applicants based on their answer to numerous questions on the application form.

As banks rushed into the credit card business in recent years, they lowered the minimum score that an applicant needs to get a credit card, to about 640 from 670.