Um... does it stand to reason that the folks with unpaid subprime mortgages are going to be the same folks with already high credit card balances and interest rates?
Just sayin', is all.
In some cases, yes, but in other cases, no.
But the people with subprime mortgages are likely already paying higher rates, and have been for some time.
Why?
Because they didn't qualify for a conforming mortgage in the first place.
These companies have FAR more credit card customers than they do mortgage customers.
And not all risk revolves around having a subprime mortgage.
You can have great credit, but if one of the companies decides that you have too many credit cards, or if the total of your extensible credit is too high (even if you haven't tapped it) it's very possible that you're going to be reassessed at a higher risk level and your card rates will be go up.
At one time a few years ago I got into an interesting situation. I hadn't been paying much attention to what was going on behind the scenes with my credit cards. The issuers kept raising my available credit without my approval or knowledge. Next thing I know I have nearly $100,000 room on my credit cards.
The kicker was that one of the companies that had been raising my credit limit then decided out of the blue that I had too much free credit and was now a risk, so they jacked my rate from 8.99% to 21%.
I called them on it and they wouldn't budge, even though they had been the ones who caused the situation.
So, I immediately paid off the balance on the card (not all that much).
The woman on the other end offered to cancel the card. No no no! I might NEED it, I told her. Oh, by the way, I have e-mail statements now, I need those changed back to paper, please. E-mail problems, you know...
For the next 3 years, once a month I charged a single cup of coffee at 7-11, waited for the paper statement to come in, and then paid it with a check.
Why? Becuase minor transactions, paper statements, and checks cost them money, far more money than they were earning from me.
