WASHINGTON–A new analysis released by the CFPB shows credit card account limits have declined overall during the pandemic, with the largest declines being for high-credit-score borrowers.
The analysis further found a spike in account closures early in the pandemic began after May 2020 that continued through at least May 2021.
The Findings
The CFPB found:
- Credit limits for prime and near prime borrowers broke with their previous upward trend and largely leveled out beginning in March 2020 and began to grow more quickly beginning in February 2021.
- There were substantial overall reductions in credit limits for super-prime borrowers after March 2020, a trend that has continued in recent months. The average super-prime borrower in May 2021 had an approximate $640 reduction in card credit available than at the beginning of 2019, and $1,320 less than the peak in March of 2020.
- Credit card limits for subprime and deep subprime borrowers appear to have changed little during the pandemic.
- For existing accounts only, from January 2019 through February 2020, there was a steady increase in average credit limits for all score groups, but credit limits on existing cards largely flattened out for all credit score groups beginning in March 2020.
- According to the Bureau, “super-prime borrowers are the only score group with substantial reductions in credit limits as the average amount of credit available to those consumers fell by about $500 by May 2021 compared to March 2020,” they wrote.
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