The Credit Crunch Goes Mainstream

If you think the “credit crunch” is a mostly downscale phenomenon, think again. A USA Today/Gallup poll indicates it has made its deepest inroads among middle-income households, while also impinging on plenty of upper-income consumers. When asked whether anyone close to them has been turned down for credit in the past three months, 28 percent of respondents in the $30,000-74,999 income bracket answered affirmatively, as did 19 percent of those in the $75,000-plus cohort. Twenty-five percent of people in the under-$30,000 bracket said the same.

In another sign of the crunch’s dimensions, a report by Synovate’s Mail Monitor service found a 14 percent decline in direct-mail offers of credit cards in the fourth quarter of 2007 vs. fourth-quarter 2006. For 2007 as a whole, credit-card mailings fell 10 percent vs. the prior year. Finally, a Mintel Comperemedia report says the volume of lenders’ direct-mail offerings for mortgages fell 34 percent last year vs. the previous year. There was also a 21 percent decline in mailings for home-equity loans and lines of credit.