Newly opened credit cards fell by 73% from March 15 to April 15 this year versus the same period last year, according to a new report by CompareCards.com.
An earlier version of this story identified the wrong company that conducted the survey and provided incorrect link to the survey.
“Most likely, the cause of this big drop is more on the banks side than the consumer side,” said Matt Schulz, chief industry analyst at CompareCards, “given the growth in unemployment and the increased need for credit cards among those unemployed.”Even if you are approved for a new card, you’ll likely get a smaller credit line. The average credit line was $700, down from $1,084 in 2019. This comes as lenders tighten credit limits on existing accounts.
“We have taken swift and meaningful action to adjust our credit policies to reflect the new environment,” said Discover CEO Roger Hochschild on the company’s April 23 earnings call. “Continuing to lend but with tightened standards for new accounts and for growing existing accounts.” “We know that consumers aren't spending as much simply because they don't have as many places to spend,” Schulz said.
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