The Consumer Federation of America has issued a report, which identifies irresponsible members of the credit card community.
The organization compiled a list of banks they believe are the worst offenders when it comes to extending credit irresponsibly. Banks were measured by their charge-off rates for debts considered uncollectible. The following banks had the highest charge off rates and were therefore rated the least responsible:
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Mellon |
9% from 6/30/96 -6/30/97 |
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Hurley State |
9% |
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Wells Fargo |
8.6% |
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First Union |
8.4% |
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Advanta |
8.2% |
In response, the American Bankers Association said that banks have expanded their credit card marketing ". . . to give people at all income levels access to credit. It is important to note that while those credit card customers have a variety of credit histories, more than 96 percent of all accounts are paid on time." The ABA also points out that charge-off rates today are the result of credit decisions made two to three years ago and banks have created more stringent standards since them.
Conversely, the most responsible banks were found to be:
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MBNA |
2.1% |
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Peoples |
2.4% |
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Travelers |
2.7% |
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First USA |
2.9% |
