During Donald Trump's first full year back in office, major US banks have begun tightening credit card approvals, focusing more on high-income users.
Banks Reduce Approval Levels for Low-Income Consumers
According to reports from major banks, total new credit card accounts fell by 5% in Q2, marking the first decline in over a year. Executives from JPMorgan Chase, Citigroup, and other large US banks pointed to tightening requirements as the main reason for this decrease, particularly among customers with lower credit scores.
High-Income Customers Become the Priority
According to Capital One CEO Richard Fairbank, the 'fastest growing part' of the company's business is driven by customers who spend heavily. Recently, banks are rolling out new premium products, emphasizing high-end cards. For instance, American Express plans to update its Platinum card this year.
Low-Income Cardholders Face Rising Costs
Despite rising credit costs, including an average interest rate of 24.35% on credit cards, delinquency rates remain stable. However, banks are still cautious, considering potential economic risks and tightening credit conditions for less affluent clients.
As lending conditions tighten, many low-income Americans are finding it harder to access credit cards, while wealthier customers continue to enjoy expanded offerings.
