Federal Reserve senior loan officers survey says demand for credit cards is greater than supply
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
Consumers’ appetite for new credit cards was stronger than banks’ willingness to hand out new accounts in the fourth quarter of 2013, according to the Federal Reserve’s survey of senior loan officers.
In what will be no surprise to disappointed applicants, the survey found that while 19 percent of responding banks said demand for credit cards was “moderately stronger,” only 7 percent eased their standards for approving card applications.
The quarterly survey, conducted Dec. 31, 2013 to Jan. 14, polled 75 U.S. banks about changes in their standards for consumer loans in the fourth quarter. Of these banks, 57 responded to questions about credit cards.
U.S. banks unclenched their fists more with existing customers than with new applicants, the survey indicated, consistent with the previous quarter. Twelve percent of respondents said they “eased somewhat” their standards on credit limits for cards. Other terms including credit score thresholds and minimum payment requirements remained unchanged at almost all respondents.
The silver lining is that banks expect fewer consumers to have trouble making their payments. Twenty-three percent of respondents said the strength of their card loans is likely to “improve somewhat” during 2014. Only 8 percent said they expect loan quality to “deteriorate somewhat.”
The Fed’s report roughly corresponded with the Office of the Comptroller of the Currency annual look at longer-term credit trends, which found that more banks eased standards for credit cards than tightened them. The OCC report, released last week, found 33 percent of responding banks said they eased card lending through mid-2013, while 13 percent tightened. Most — 54 percent — said their standards were unchanged.
Banks clamped down hard on consumer loans in 2009 and 2010, including largely unsecured credit card loans, the OCC study said. The Comptroller’s “Survey of Credit Underwriting” is based on examiners’ observations and assessments of underwriting standards. The survey, which was released Jan. 30, included 86 large national banks and looked at the 18 months that ended in June 2013.