NEW YORK, Nov 21 (Reuters): Demand for new credit in the US over the last year has declined and will likely stay soft in the future, according to a survey released on Monday by the New York Federal Reserve.
There was a "notable" decline in credit over the last year, with application rates at 41.2 per cent, compared to 44.8 per cent in 2022 and the pre-pandemic 2019 level of 45.8 per cent, the regional Fed bank's quarterly Survey of Consumer Expectations Credit Access survey showed.
But even as the overall application rate for new credit declined among those surveyed, interest in applying for more credit card debt rose. The survey said that reading had hit 29 per cent as of October and was 26 per cent for 2023, compared to a 27.2 per cent credit card application rate in 2019.
Over the next year, the proportion of people in the survey who plan to apply for more credit ebbed to 25.1 per cent in October and 25.9 per cent for the year as a whole. Last year, the proportion of those who planned to apply for new credit stood at 26.7 per cent.
The report noted that expected decline in applications for credit extended to new credit cards, auto loans, mortgages and home refinancing. Respondents also see "significantly higher" prospects of future credit applications being turned down.
Earlier this month, a New York Fed report on total household debt levels during the third quarter found a 4.7 per cent rise in overall credit card debt to $1.08 trillion, which it attributed to the strong economy and robust consumer spending.
US demand for new credit down in 2023: NY Fed survey
FE Team | Published: November 21, 2023 22:47:20
US demand for new credit down in 2023: NY Fed survey
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