NEW YORK—Subprime borrowers are seeing their credit card limits cut the most as banks reduce exposure during the coronavirus pandemic, according to TransUnion data.
“The risk-management strategy shows a squeeze is coming for households with the most precarious finances as the U.S. government pares assistance for people who have lost their jobs amid the Covid-19 crisis,” Bloomberg reported.
Not only are many losing income, they’re also losing access to credit. Banks cut overall borrowing limits for subprime borrowers by about 19% during the second quarter, according to TransUnion.
That compares with an average reduction of just 1.2% across all card accounts during the same period, Bloomberg said.