A recent survey of our consumer credit traffic reveals Americans were hungrily shopping for Christmas credit, most noteably for unsecured lines of credit with a near equal split between prime and subprime credit lines.
Overall, 15.5% shopped for prime (large credit lines that require good credit) whereas 15% sought subprime (low-limit, bad credit loans and credit cards). Only 6% sought fair credit offers, while slightly fewer people (4.5%) shopped for bad credit offers. Although these numbers do not accurately reflect the percentages of Good VS Bad credit people, the reason for the abnormally high prime credit searches may be because people wanted to spend a lot of money on Christmas, much more than a subprime loan or credit card would fund.
In regards to loans, 11.5% shopped for mortgages, perhaps to obtain large personal loans for Christmas purchases, and 8.75% looked for unsecured loans, mainly short term, high risk personal loans. 8% looked for auto loans and car refinancing.
As for a breakdown of credit cards, 13.5% browsed for prime credit cards with large credit limits and rewards, while 14.25% sought subprime bad credit cards with easy approval and low limits. Again, there are generally far more searches for subprime over prime, yet this is likely due to peoples' needs for large credit lines which subprime doesn't offer.
It's very interesting to note, that only the remaining 3% searched for some form of debt relief, of which a whopping 2.5% specifically looked for debt settlement assistance versus credit counseling, bankruptcy and other debt relief options. It's natural during the Christmas credit shopping season to seek new lines of credit and to delay thoughts of debt management until Christmas credit card charges start pouring-in after the holidays. Typically, it's late January before we witness higher percentages of people combing the internet for debt help and then; beginning in February, auto financing activity as people consider using their tax refund as a new car loan downpayment.
These statistics should be an eye-opener for legislatures who aim to shut-down all bad credit loans and credit cards. Doing so would have a tremendously adverse affect on the economy, particularly during the Christmas season when retailers depend on the higher shopping activity to make their annual profits. If legislatures ban subprime credit, many won't be able to fund Christmas and; at the very least, won't be able to spend nearly as much to help spur the economy and preserve jobs.
