Credit Applications Hit 3-Year Peak as Banks Slash Rejection Rates, NY Fed Says

The share of consumers who applied for credit products reached the highest level in over three years in February, according to the Federal Reserve Bank of New York.

The application rate for any credit product over the 12 months ending in February reached 44.4%, up from 41.4% in the prior survey of October 2025 and the highest reading since October 2022, the New York Fed said in credit access survey data released Monday (March 16).

Credit cards saw consistent growth over the past year and reached an application rate of 30.1% in February, a new post-pandemic high. Consumers ages 41 to 59 drove the bulk of the increase, with demand increasing the most across consumers with credit scores considered good to very good, according to the survey.

The overall rejection rate for any kind of credit over the past 12 months decreased to 15.9%, the lowest level since June 2021, with rejection rates falling across all credit types. Rejection rate across credit card applicants stood at 12.9%.

Credit card limit extension applications stood largely unchanged at 17.4%, which is a relatively high figure looking at the last few years. In the February 2025 survey, that figure was gauged at 14.2%.

The centrality of credit for spending and overall consumer morale is becoming even more evident as the economy navigates complex times. According to the new PYMNTS Consumer Expectations Index, households still feel able to manage their monthly obligations but are less certain they’re better off financially.

There is evidence that stability is being maintained through balance-sheet management rather than broad improvement in day-to-day financial circumstances, the PYMNTS Intelligence report found. Several indicators of consumer sentiment show that uncertainty about the future is widespread and that this induces more strategic and focused spending, especially among tighter budgets.

The latest Bureau of Economic Analysis (BEA) data, released Friday (March 13), shows that while income growth picked up in January and inflation remained relatively contained, spending continues to outpace income in real terms, while overall economic growth slows.

Jobs data aren’t providing much relief: openings as a percentage of all jobs in the economy stand at 4.2%, following a significant cooling over the past 24 months. Hirings have also been stagnant at below 3.5% over the last six months, a lower bound that hadn’t been matched since 2014.

The result is an economy that is still expanding, but with consumers carrying much of the momentum while managing rising costs and limited financial buffers.