Growing Credit Card Demand Defies Economic Slowdown

Unlike other forms of credit, card demand has withstood rising rates

couple shopping online with holding credit card
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Key Takeaways

  • Credit card demand has not succumbed to a slowing U.S. economy and recession concerns
  • Card demand mirrors stability of overall consumer spending in 2022
  • Expectations for auto and mortgage loan demand, though, have declined

Demand for consumer credit has declined this year, coinciding with the slowdown in the U.S. economy, with one notable exception: credit cards.

The latest Survey of Consumer Expectations Credit Access Survey, conducted every four months by the Federal Reserve Bank of New York, shows that the average application rate for any kind of consumer credit during the 12 months through October fell to 44.8% from 45.6% in the year ended October 2021. Application rates for auto loans and mortgage loans fell slightly, and mortgage refinancing plunged.

Average credit card application rates, however, rose to 26.7% in the 12 months through October from 23.1% in the prior 12-month period. And despite rising interest rates and increasing concerns about a possible recession in 2023, consumers don't expect credit demands to change much in the coming year. The New York Fed survey found that while households anticipate they'll be less likely to to apply for auto and mortgage loans or refinance their mortgages, they expect a higher likelihood of applying for new credit cards or asking for limit increases on existing cards.

Consumers also appear optimistic that credit standards will soften, with lower rates of rejection on applications expected in the next 12 months. Rejection rates on all credit applications increased slightly in the year ended in October, but they fell to 18.5% from 20.9% for credit card applications.

The greater demand and lower rejection rates for credit cards may reflect the growing ease with which consumers can apply for and receive credit cards, not to mention the expanding ways they can use them for purchases. Innovative payment processing systems have made it easier for consumers to access embedded technology in everything from cell phones to cars to buy goods and services via credit.

The sturdiness in credit card demand compared with other types of consumer credit also mirrors the consumer spending trends of the past several months. Though consumer confidence readings have declined steadily throughout 2022, consumers have not matched their weakening expectations and increasing pessimism with significant changes in actual buying behavior.

U.S. retail sales growth, for example, has remained relatively stable since March, increasing 1.3% in October from the previous month, the biggest monthly gain since February. Overall, consumer spending has gradually increased in 2022, as well, with monthly personal expenditures rising four of the last five months through September.


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  1. Federal Reserve Bank of New York. "Credit Cards Defy Slowdown in Broader Credit Demand and Access." https://www.newyorkfed.org/newsevents/news/research/2022/20221121

  2. Surveys of Consumers. University of Michigan. http://www.sca.isr.umich.edu/

  3. Bureau of Economic Analysis. Personal Income and Outlays, September 2022. https://www.bea.gov/news/2022/personal-income-and-outlays-september-2022

  4. Tradingeconomics.com. U.S. Retail Sales. https://tradingeconomics.com/united-states/retail-sales