PASADENA, Calif.—Another non-traditional financial services provider has entered the credit card market.
This time it’s Green Dot Corp., one of the nation’s largest providers of prepaid debit cards.
The company said it would start offering a secured credit card aimed at building credit profiles for consumers who either have no credit history or poor credit scores. A secured credit card is typically a payments vehicle designed to help consumers rebuild their credit, and is a step toward being eligible for a traditional credit card.
Green Dot’s move comes as analysts have stated that more card issuers are targeting less creditworthy customers. For example, Discover Financial Services recently began offering a secured credit card.
At the same time more card issuers are targeting those with poor credit, a report this summer shows the percentage of Americans with subprime credit scores declined to the lowest level in more than a decade. According to data from Fair Isaac, the developer of the FICO score, the share of U.S. adults with credit scores that are considered “subprime” fell to 20.7% in April, the sixth consecutive year-over-year decline and the lowest level since at least 2005, which is when Fair Isaac first began tracking the data. Subprime borrowers peaked during the financial crisis at 25.5% in 2010.