[eMarketer] Credit card applications reached pre-pandemic levels this year

In October, 26.5% of US consumers said they applied for a credit card in the past 12 months—up from last October’s 15.7% of consumers who said the same, according to data from the New York Federal Reserve.

This is the highest number of applications since the pandemic started. It also supports a trend seen earlier this year: In March 2021, there were nearly 6 million US credit card openings, up from 4.54 million in March 2020, per Equifax.

An aggressive customer acquisition push from card issuers earlier in the year contributed to the surge in applicants.

In the early months of the pandemic, many US consumers limited their credit card use for fear of accruing debt during a period of economic uncertainty—putting a dent in issuers’ credit volume. To offset losses and encourage spending, many issuers—including Amex and Chase—added pandemic-related card perks like extra rewards on food delivery and streaming services.

They also implemented attractive sign-up bonuses to push new customers to cards: For example, Citi’s Custom Cash card offers customers $200 cash back after spending $750 in purchases within their first 3 months, as well as a low introductory rate on purchases and balance transfers for 15 months.

eMarketer however argues that the surge in credit card applicants doesn’t guarantee higher profits for issuers.

Read the full eMarketer article here

www.emarketer.com