Since the CARD Act went into effect in early 2010, average
credit limits are getting lower, and you need a higher credit score
to get these more measly limits. That's according to a
from the American Bankers Association (ABA) filed with the Consumer
Financial Protection Bureau.
The Feb. 19 letter tracked data about credit availability
between 2007 and 2012. The ABA concluded that, while the CARD Act
has reduced surprises such as sudden interest rate increases and
has diminished consumer-unfriendly terms, there have been
"significant trade-offs," such as higher interest rates, lower
credit limits and less available credit, especially for those with
lower scores. The act was passed in May 2009, and its major
provisions took effect in February 2010.
While the ABA points to the CARD Act as contributing
to stingier credit, it's not the only factor. The massive
recession, which officially lasted from the end of 2007 to the
middle of 2009, also tightened issuers' credit standards. The
charts below track the average credit (risk) scores and average
credit lines of new credit accounts (accounts open less than 24
months). As the recession took hold, average credit scores
increased, as those with lower scores got blocked from new credit.
As for credit lines, their downward slide began at the height of
the recession and continued until after the Act took effect.
Bankers' group: CARD Act raised rates, lowered
To use the graphic on your site, use the following
alt="Lower limits for higher scores: The credit world post-CARD