Credit Card Limits Trending Upward

The CFPB has examined whether credit has tightened on existing credit card accounts. Due to the large unemployment and income shocks that occurred due to the pandemic, households may have been less likely to repay their debt, and in turn, financial institutions may have begun limiting households’ access to credit.

Beginning in March 2020, credit limits for prime and near prime borrowers broke with their previous upward trend and largely flattened out. Starting in February 2021, limits began to grow more quickly for these groups. In contrast, super-prime borrowers had substantial overall reductions in credit limits after March 2020, and this trend has continued in recent months. The average super-prime borrower in May 2021 had about $640 less credit card credit available than they had 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 seem to have changed little during the pandemic.