Americans Fancy More Credit But Banks Are Wary

Increasing numbers of American citizens have searched for credit in late 2011, but banks didn’t help them in their efforts whether they wanted to buy a new card or increase the credit limit of their existing credit cards.

This has been foretold by Federal Reserve.

The Federal Reserve carried out their latest survey of senior loan officers; a very small numbers of banks are helping their customers to make new credit cards with ease but most of the banks are not very helpful in giving credits and are also cutting back their offers for new and old users.

Dennis Moroney, research director in the bank cards division with advisory services firm TowerGroup, said that:

They’re being very selective about who they offer credit to.

After every three months, Federal Reserve surveys the loan officers all around the country and asks them about their experience in lending industry in the last three months. In their latest report, about 15.5 lenders observed a new demand for new cards.

Many of the applicants having low credit rates and wanted to gain access to their new cards had to go through tougher times to get approved for their required cards.

This report also shows that only 14 percent loan officers said that their banks made it easier for their customers to qualify for the new cards. None of all the 37 officers who gave the survey said that their bank has eased lending standards. And 2.3 percent of officers said that they have tightened their standards.

The credit card users have seen their credit limits getting lowered as 5.4 percent of officers said that they are cutting the limits for new and old users. About 8.1 percent of officers said that they made it easier for their customers to expand their credit line. But a large majority of 86 percent officers said their limit stayed the same.

This lender’s inflexibility to provide large credit to cardholders who have bad credit history is quite old. After the economy fluctuation in 2008, the banks all around the country reviewed their policy of credit card lending. Some new policies introduced cutting user’s credit card limits, increasing interest rates, and a more strict history for new applicants.

Banks didn’t start to lose the tight grips of lending credits to customers till 2010. But still most of the banks across country are very slow to make changes in their existing credit lending systems.

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