A Tale of Two Borrowers: What Credit-Card Tightening Reveals About the Economy

Credit standards are quietly shifting in the U.S., and the divergence is revealing. In recent months, major banks have tightened access to credit cards for some borrowers while actively courting others. The trend, while subtle on the surface, provides a meaningful lens through which to view the state of the consumer economy, risk appetite among lenders, and the increasingly bifurcated spending patterns across income levels.

Credit Access: Narrowing for Some, Expanding for Others

According to second-quarter earnings reports and the Federal Reserve’s latest Senior Loan Officer Survey, banks are raising qualification requirements for new credit-card applicants, particularly at the lower end of the credit spectrum. This shift comes as lenders seek to reduce exposure to riskier borrowers, who are more likely to miss payments amid high interest rates and inflationary aftershocks.

Total new credit card openings across four major issuers fell 5% in Q2, the first such decline in over a year. At American Express, new accounts dropped 6% year-over-year, but that decline masks an important nuance: while lower-tier approvals fell, premium card engagement rose. The average annual fee collected per card at Amex rose from $101 to $117, driven by the continued growth of premium-tier customers.

Higher-End Consumers: A Spending Engine That Banks Want In On

The resilience and spending power of high-income households continues to show up in the data, and credit card marketing reflects that. JPMorgan Chase and Citigroup have recently launched or upgraded their premium credit offerings, and American Express is preparing a major refresh of its flagship Platinum card. Meanwhile, Capital One opened a luxury airport lounge in New York’s JFK for its Venture X cardholders, a clientele that the lender explicitly described as the fastest-growing segment of their card business.

Behind these product upgrades is a clear economic rationale: high-spending, high-credit-score customers are lucrative. They generate reliable interchange fee income (the transaction fee paid by merchants) and are more likely to pay off balances in full, reducing credit risk. In an environment where lenders are increasingly cautious about defaults, these customers offer volume without volatility.

Premium spending is outpacing aggregate consumer activity. Amex reported that while airline ticket spending was flat overall, spending on front-of-cabin seats rose 10%. Similarly, bookings for short-term rentals over $5,000 rose 9%. In other words, while the average traveler may be pulling back, the top-tier traveler is accelerating.

Lower-End Consumers: Facing Higher Costs and Fewer Offers

At the other end of the spectrum, households with weaker credit profiles are being screened out more aggressively. In April, more than 87% of card-related direct mail was “prescreened,” meaning the recipient had already passed a creditworthiness filter. That’s the highest rate in nearly three years.

This risk filtering reflects both economic caution and structural cost pressure. As of this month, the average interest rate on credit cards hit 24.35%, according to LendingTree. For households already carrying balances, these costs are compounding, literally and figuratively.

Notably, card balances are rising, suggesting that many lower-income consumers are leaning on credit to maintain spending. This can be a sign of resilience—or stress—depending on the context. So far, delinquency rates remain stable, but the underlying dynamic signals growing pressure: more borrowing, at higher rates, with less access to fresh credit.

The Bigger Picture: Credit Trends as a Mirror of the Consumer Economy

The divergence in credit standards illustrates a broader story playing out across the U.S. economy: a two-track consumer landscape. High-income earners are not only holding steady, they're driving discretionary spending in key categories. Meanwhile, lower-income households are facing tighter access to credit at the same time their cost of borrowing is climbing.

Banks are responding accordingly: tightening where risk is rising, and expanding where rewards remain stable. This isn’t just about credit cards. It’s a signal of where lenders believe strength and fragility reside in today’s consumer landscape, and a reminder that averages can obscure increasingly divergent realities beneath the surface.