Well, in the short term, subprime borrowers of all kinds (that is, people with poor credit) are apparently being targeted with more credit card solicitations than ever. "Direct-mail solicitations to subprime borrowers were 41 percent higher in the first six months of 2007 than they were in the first half of 2006. At the same time, solicitations to the most credit-worthy consumers fell by 13 percent. And the numbers are even starker when you look at June of 2005. "
As well, credit card delinquencies are up because people are finding it harder to use their home equity to pay off debt.
Like mortgages, lots of credit card debt, car loans and student loans are also packaged into asset-backed securities that are sold to investors, which does raise the specter that as the secondary market dries up, this kind of debt will be harder to get (or just more expensive.) The SF Chronicle says:
"I'm clearly hearing that bankers are being cautious, taking a second look, making sure they understand the risk they're taking," says James Chessen, chief economist with the American Bankers Association. For the riskiest customers, "it's naturally going to cost the borrower more," he says. But by and large, "for consumers with good credit, there has been no spillover effect" from the mortgage crisis, says Greg McBride, a senior analyst with Bankrate.com.So: if you have bad credit, you will have the opportunity to get more credit , and more expensive credit. If you have good credit, you will have fewer opportunities to get credit that costs essentially the same as before. I think I know which side of the line I want to be on.
The Chronicle article also uncritically repeats threats from student lenders that with the $21 billion subsidy cut, they will just be forced to cut all discounts from loans. Because god forbid they should have to compete, actually compete, on price.