The banking sector’s wobbles could reverberate in the fine print of credit-card offers — resulting in stingier deals.
Tighter standards could translate to less attractive APR offers, shorter lines of credit and/or fewer offers for consumers to choose, the experts said. — Michael Taiano, senior director, North American Banks at Fitch Ratings “Initial reactions by issuers will be to more closely review new applicants for their credit cards and raise the bar on creditworthiness,” said David Robertson, publisher of the Nilson Report, a subscription-only payment card industry trade journal that does not accept advertising. Card issuers will also spot “weak” and “at-risk” accounts” and prepare to raise prices, he added.
Americans had $968 billion in credit-card debt as of 2022’s fourth quarter, surpassing a pre-pandemic high of $927 billion. On Sunday, New York regulators closed Signature Bank and the FDIC stepped in. At both banks, depositors got access to all their money, regardless whether the amounts surpassed the FDIC $250,000 coverage limits, federal government regulators said.
One quarter earlier, nearly 19% of the surveyed loan officers said they somewhat tightened standards. It’s difficult to say how fast the tighter standards would filter into consumer credit-card offers, Schulz said. But it could be quick, he added. Consumers are getting squeezed So can consumers afford a more costly card with higher rates and less purchasing power?
They already started doing this months ago. They know what's coming.
Disinflationary