Credit Applications Surge As Americans Scramble For Cash To Make Ends Meet

Joe Raedle/Getty Images

Daily Caller News Foundation logo
Will Kessler Contributor
Font Size:

In February, the percentage of Americans applying for credit in the past year reached its highest point since October 2022, as consumers seek financing to counteract persistent inflation, according to the Federal Reserve Bank of New York.

The application rate for any kind of credit reached 43.4% in February, up from 42.5% in October and 40.3% in June 2023, according to a survey taken by the New York Fed. The rise in the number of Americans looking for credit accompanies persistent inflation that continues to stress consumers, with prices increasing 3.2% year-over-year as of February, far higher than the Federal Reserve’s 2% target. (RELATED: Huge Discrepancy In Jobs Data Could Be Making Biden’s Economy Look Way Stronger On Paper)

The overall rejection rate for credit applications has declined in tandem with the pick-up in applications, falling from 21.1% in October to 18.7% in February, according to the New York Fed. The rejection rates increased for applications on mortgages, credit card limit increase requests and mortgage refinance applications but decreased for credit cards and auto loans.

A rise in mortgage applications led to the increase in October as high housing costs and interest rates continue to cut into Americans’ finances, according to the New York Fed. Auto loans saw a decrease of 3.7 percentage points, while all other credit categories besides mortgages ticked down slightly.

Interest rates on all forms of credit have faced upward pressure from an increase in the federal funds rate by the Federal Reserve, which has been placed in a range of 5.25% and 5.50%, the highest range in 23 years. The rate was set at that level in response to a surge in inflation that peaked at 9.1% in June 2022 under President Joe Biden.

Americans collectively accumulated a record amount of debt in the fourth quarter of 2023, totaling $17.5 trillion after a gain of $212 billion compared to the previous quarter. Credit card debt rose by $50 billion in the quarter and $143 billion in the year, totaling $1.129 trillion.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact