The number of new credit cards being opened has taken a significant hit because of the coronavirus.
New card originations from March 15 to April 15 fell by 73% compared with the three-year average from 2017 to 2019, according to CompareCards, a website that compares credit card offers for consumers.
Only 2.3 new cards per 100 people with credit reports were opened for that time period, compared with 8.8 new cards in 2019. That number was just 1.7 for cards opened by banks and credit unions, down from 6.4 in 2019.
Credit card growth at CUs was already on the decline before the pandemic struck.
The average credit limit on new cards also declined by 26%, to $1,948, this year, compared with the three-year average from 2017 to 2019, according to CompareCards.
These changes can be attributed to lenders becoming more concerned about managing for risk.
“As we saw a decade ago during the Great Recession, massive economic changes tend to spur big action from credit card issuers,” Matt Schulz, chief industry analyst, wrote in a CompareCards blog post on Monday. “We’re seeing something similar play out in the wake of the COVID-19 crisis.”
Some card issuers have
Additionally, CompareCards said consumer demand has also probably plummeted because of social distancing guidelines.
“While some cardholders might be spending more on their cards, perhaps using them as a de facto emergency fund to help them make ends meet after losing their job, many other cardholders are spending far less,” Schulz wrote. “They’re following social-distancing guidelines or stay-at-home orders, so they’re not spending at restaurants, bars or ball games.”
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