What is your consensus on recent relaxed credit & CLI due to vaccines & 3rd stimulus payment ?

[4sallypat]

Just a question to toss out:  

what do you think of very recent credit card issuance / approvals and credit line increases I have been seeing on this board....

Are these the reasons for the increased confidence in lending due to:  vaccine rollouts and 3rd stimulus payments ?

Are there other reasons creating an air of confidence by card companies and businesses in general ?

[M_Smart007]

I personally think!?!?  ... that banks have had somewhat a grasp on the the worst of it, after a year of Covid-19.

Actually, per some news post .. seems like a lot of people have paid their credit cards down.

(Understandably of course, those without jobs may not be able to)

[coldfusion]

Being a little proactive and reminding everyone that political commentary is one of the 5 things we don't talk about here on MF. 

[Horseshoez]

Good questions @4sallypat, I really don't have an answer for you, but I was rather surprised last week when PenFed approved me for a $6,000 starting limit on their Rewards card only a year post discharge.  Most things I've read indicate that card requres credit scores of 750 or higher to get approved and I am in the 690-701 range.

The one possible mitigating factor is I have a nice chunk of change parked in a PenFed savings account; I mentioned that when I was thinking about applying and several folks said the savings would be a non-factor.  At this point, I really don't know.

[Anonymous]

Card UW hasn't relaxed at my bank, in fact it's gotten harder over the past year

Navy's a good example of the tightening, they shrunk CLI limits to 4k max per attempt and haven't let up

[4sallypat]

@coldfusion  Yes, good point - I deleted the original mention of someone in office....

Just trying to figure out if lending practices are being relaxed due to the pandemic changes of recent weeks...

So far, it makes sense that a lot of people did pay down debt over the the past year - I know I did - went from 35% utilization to 12%.

Thereby causing a lot more card offers, CLI, pre-approved apps....

[M_Smart007]

@4sallypat, Congrats on paying down your debt

[Anonymous]

I tend to think that once the stimulus money dries up, lots of people will be in trouble. U-6 unemployment is still at 11.6% and U-3 is still at 6.6% and lots of jobs were permanently eliminated during the pandemic. Businesses aren't done failing yet as the economic fallout continues and we still have a ton of evictions that are going to end up happening eventually. 

We have a long way to go before all of this is over. We have Monopoly money holding up the economy right now. Let's see what happens when reality sets in... All 28 trillion dollars of it. 

[iced]

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@4sallypat wrote:

Just a question to toss out:  

what do you think of very recent credit card issuance / approvals and credit line increases I have been seeing on this board....

Are these the reasons for the increased confidence in lending due to:  vaccine rollouts and 3rd stimulus payments ?

Are there other reasons creating an air of confidence by card companies and businesses in general ?

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I don't think it's confidence so much as banks playing the odds that more mid-to-lower-risk people might want to borrow money. These people are usually a tougher sell, but there's recent data suggesting more from this group are either taking on expenses they can't easily pay out of pocket or have residual debt from during the shutdown that these banks want. These people are being targeted hard by banks for loans, balance transfers, CLIs and other offers to extract fees and/or interest out of borrowers who may now be open to taking on more debt.

Stimulus payments should have 0 effect on confidence, though. They're one-time (or three-time) things that are not guaranteed nor likely to happen again, and not everyone gets them.