by Wolf Richter
Consumers cut back on applying for credit cards, and the Fed is not amused.
Consumers in aggregate backpedaled massively on credit card applications since the Pandemic; and they also backpedaled on asking for a higher credit limit on credit cards they already had. And a larger percentage of those that did apply for a credit card or for a higher credit limit were rejected. These are some of the findings of the New York Fed’s Survey of Consumer Expectations “Credit Access Survey,” released today. The Credit Access Survey is undertaken three times a year (also in February and June).
The notion that consumers are cutting back on credit-card borrowing frazzles the Fed; the sky-high interest rates, in many cases over 20%, in a near-zero interest rate environment, is where banks make extraordinary profits. And consumers, those who can least afford it, are paying out of their nose for these bank profits.