@Revelate wrote:
@babbles wrote:
will lenders start to cut credit limits on existing cards??
I suspect things will need to get markedly worse before that happens. I haven't looked at the payment data as of late but people are still making their payments.
It's when deliquencies and defaults start creeping up that banks get skittish. Right now banks are tightening their belts, my mortgage is going to be non-trivially more expensive than it would've been 2 years ago and some freebies are going away at Chase anyway.
I'm still sitting on 11 revolving lines I haven't used in years and only like 3 closed on me. Pretty sure there's a bunch of low hanging fruit that lenders can whack before cutting lines that are being used and in good standing.
I generally agree that we're not there yet, but I do think we're seeing the first canaries in the coal mine starting to keel over. There were news articles a few months ago about auto lending getting tighter, and the FNBO mega thread where they're handing out CLDs like candy shows at least one credit lender that appears to be reacting to the economic worries. Though that's still outweighed by the more positive reports. I haven't seen super-recent numbers, but it was only a month or two ago that Cap1 and a few other credit card issuers were reporting record high promotional spend, intended at capturing new cardholders, and we're seeing new or revamped cards with higher rewards or higher SUBs (e.g. $300 for the no AF WF Autograph, or lots of travel cards). The last reports I saw showed that credit card debt was jumping, but hadn't reached pre-pandemic levels, and households had more savings than before. Combined with the resurge in spending after the pandemic, credit card issuers were trying to capture some of that money while there was still a safety margin.
But we also know the big banks are paying a lot of attention to the economy, so if there is a crunch, I expect purse strings could tighten very rapidly.
