Direct mail credit card offers to subprime customers rose 41% year over year in the first half of 2007, at the same time as defaults on subprime mortgages were rising. (By June, nearly a fifth of subprime mortgages were over 60 days past due and about 5% were in default.) HSBC led the direct mail surge, with over 100% growth. As subprime customers were being solicited, direct mail offers to more credit worthy customers fell 13%. Mintel International Group, which published the credit card direct mail data, suggested that credit card companies stepped up their marketing to capitalize on the reduced availability of refinancing and home equity loans for subprime borrowers. The subprime market is profitable for credit card companies because customers are charged higher interest rates and typically make only the minimum monthly payment. Travis Plunkett, legislative director of the Consumer Federation of America, said "It's another sign that some credit card issuers are engaging in risky, irresponsible lending to vulnerable consumers."
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