According to recent data from Equifax, American credit card issuers mailed out 38% fewer credit cards in the first four months of 2009 than they did during the same period in 2008. Reasons for the drop in new credit cards include:
- Card issuers, like Advanta, have ceased opening new accounts altogether.
- Government capital requirements and "stress test" results have influenced lenders to extend smaller credit lines, making pre-approved accounts less attractive for new borrowers.
- Consolidation among banks, such as Wells Fargo and Wachovia, has reduced competition for new customers.
- With fewer fee-free offers on the market, consumers are less likely to make a balance transfer or switch banks.
- Stronger underwriting guidelines have restricted borrowing by less qualified customers.
As government officials encourage Americans to spend more cash and stimulate the economy, falling credit card limits worry some economists. According to Moody's analyst Mark Zandi, government leaders may want to pursue additional tax incentives to offset consumers' lack of access to credit.