As the coronavirus pandemic wreaks havoc on jobs and the economy, Americans are now less likely to get a new credit card as banks pull back on lending and fewer applications come in.
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 of 100,000 anonymized credit reports. Only 2.3 new cards were opened per 100 people with credit reports, compared with 8.8 new cards in 2019.
Credit card issuers, such as Discover Financial Services, have been offering fewer cards to new customers since the pandemic started.
“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.”
But the low number of new cards is also a result of fewer Americans applying for one. Since the start of the pandemic, credit report inquiries for new credit card applications declined by 40%, according to a recent report from the Consumer Financial Protection Bureau.