Americans want access to more credit than they have since the pandemic began. Demand for borrowing is increasing, albeit alongside consumer jitters about being able to shoulder unexpected bills.
What’s happening: Requests for credit card applications and credit limit increases are leading the demand rebound, according to the latest credit access survey from the Federal Reserve Bank of New York.
- Credit card application rates reached 26.5% in October 2021, up 10.8 percentage points from the low point hit last October.
- Mortgage application rates have also exceeded 2019 and 2020 levels, though the appetite for refinancing has subsided a bit in the second half of this year.
Yes, but: Lenders may not generate more profit from the trend because while people might borrow more they are also paying off balances at a faster rate, the Wall Street Journal reported.
What we're watching: Households say that with the exception of mortgage refis they are likely to apply for even more credit over the next 12 months (think mortgages, credit cards, card limit increases and auto loans), the survey found.
- The strengthening appetite coincides with respondents, on average, having a lower expectation for being able to cover a $2,000 emergency expense — while at the same time expecting to have to do so.
A credit feast - Axios
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