Why more issuers see profit in secured credit cards
Ally Financial's recently announced $2.65 billion cash-and-stock deal for CardWorks, which offers unsecured credit cards among other products, places a high price tag on a traditionally risky product.
The market for secured credit cards, which require a deposit and set a relatively low spending limit, generally ebbs and flows with the economy. Banks aren't the only ones to take notice that the time may be right to reinvest in thin-file borrowers.
Amazon.com's entry into the secured card market, as well as increasing competition from fintech startups, demonstrate there's an opportunity to offer credit to consumers who may not have had other opportunities to establish credit.
This story was compiled from reporting by PaymentsSource writers including John Adams, Kate Fitzgerald, David Heun, Michael Moeser and Daniel Wolfe. Kevin Wack and Laura Alix also contributed reporting.