BIRMINGHAM, Ala. – A new study found despite declines in credit card delinquencies and the availability of cheap funds, most bank credit card issuers have not eased their underwriting standards.
The findings were released as part of the Senior Loan Officer Opinion Survey on Bank Lending Practices by the Federal Reserve. The survey also showed only a moderate increase in consumer demand for credit cards.
“The Federal Reserve is doing what it can to encourage lending and borrowing, trying to give a positive boost to the economy,” said Bill Hardekopf, CEO of LowCards.com. “But consumers and banks are still cautious. Lenders and borrowers seem to be avoiding the risk of additional debt.”
Hardekopf noted other key survey findings:
• 19% of large banks (and 14.3% of all banks) see moderately stronger consumer demand for credit cards.
• Credit standards for approving applications for credit cards from individuals or households eased somewhat at 16% of large banks and 9.3% of all banks.
• The credit limits on new or existing credit card accounts for individuals or households have not changed much at banks. These credit limits have “tightened somewhat” on 17.4% of large banks (and 11.1% of all banks) but also “eased somewhat” at 13% percent of large banks (8.3% of all banks). The limits remained unchanged at 80.6% of all banks.
• The minimum required credit score remained unchanged for nearly all banks (97.2%).
