NEW YORK—American consumers are applying for credit cards at pre-pandemic rates, an increase that is broad-based across age and credit score groups, according to the New York Federal Reserve.
The application rate for credit cards rose throughout 2021, reaching 26.5% in October, 10.8 percentage points higher than its October 2020 level, which was a series low.
In addition, data showed that the application rate for credit card limit increases also rebounded from the October 2020 low of 7.1% to 11.3% in October 2021, just below its October 2019 level of 12.0%, reported GOBankingRates in its analysis.
Erica Seppala, financial analyst at Merchant Maverick, told GOBankingRates that as the world starts to recover from the effects of the COVID pandemic, consumers are feeling more confident in taking on debt, as well as applying for loans and credit cards again.
“As we approach the holidays, consumers are looking for a backup source of funding for emergencies, and borrowers that are still playing ‘catch up’ from loss of wages (due to the pandemic),” Seppala said. “So, it should be no surprise that credit card applications are on the rise.”