Numerous credit card issuers loosening standards

According to a report by the Boston Globe, many credit card companies are beginning to loosen their restrictions for lending, signaled by an increase in credit card applications sent to consumers nationwide in 2011.

The newspaper states a number of lenders offered deals that haven't been proposed to consumers since before the financial crisis that affected much of the country in recent years, such as zero percent interest for two years on certain cards.

Some reports have indicated credit card issuers' easing of lending standards in the past year. A survey of loan officers by the Federal Reserve shows lenders relaxed lending restrictions, while a report from TransUnion stated more than half of cards issued in 2011 were to consumers with less-than-perfect credit.

Though many economists say the looser lending could spark the market, some analysts are concerned about over-lending occurring once again, possibly leading to another financial crisis.

"I am concerned that people will take on inappropriate amounts of credit or be allowed to do so," Consumer Action director Linda Sherry told the paper. "Card companies are under great pressure not to hand out cards to people who can't pay them back."

However, despite worries from consumer advocates such as Sherry, a number of experts who work with the credit industry aren't concerned with poor lending happening nationwide.

Ezra Becker, vice president of research and consulting for TransUnion's financial services unit, told the Globe that just because credit card companies are increasing offers for their products doesn't mean they won't properly evaluate applicants.

"It doesn't mean the banks have opened up the floodgates or they have lost all sense of caution," Becker told the newspaper.

One sign of evidence that consumers are able to handle new cards and other loans is a rise in the number of cardholders paying off their bills. TransUnion reports less than 1 percent of consumers were 90 days or more delinquent on their loans during the third quarter of last year.

Moody's senior credit officer Luisa De Gaetano said in a company report that standards for lending should ease more in 2012, when considerable progress is expected to be made in the overall economy.

Should consumers find themselves with substantial debts this year, hiring a credit counseling firm to help their financial situation may help.

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Numerous credit card issuers loosening standards