13 February 2005
Your basic high-interest product
In Britain, they're called "doorstep lenders," but we have them here too: loan offices which specialize in lending to persons of questionable or nonexistent credit. More mainstream lenders tend to look down their noses at these competitors, and there is constant negative attention from opponents of such schemes.
Up to now, most such lenders have handed over cash through storefronts: there have been subprime credit cards, but so far issuers of plastic haven't approached the astonishing annual percentage rates typical of a cash-advance place. This is apparently about to change, at least in Britain, where Provident Financial, a large doorstep lender, has opened up a subsidiary called Vanquis Bank, whose purpose is to issue Visa cards at 49.9 percent or even higher rates. Few American card issuers venture beyond 30 percent.
With limits starting around the £150 range, the Vanquis Visa could be considered a comparatively-inexpensive alternative to the storefront lenders, but Her Majesty's Government is of course incensed that anyone could even think of such a thing.
Provident is already offering a Visa-branded card that allows access to payday-loan proceeds via ATM.
(Via The World Wide Rant.)Posted at 3:11 PM to Common Cents