Large Banks Expanded Credit Access for Some Borrowers
Financial institutions increased new card approvals for those with lower credit scores while keeping individual lines small.
Updated on Oct. 13, 2026 in Credit Cards
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Large banks in the United States expanded credit card access to more borrowers with credit scores below 660 during the second quarter of 2026. This shift saw these consumers account for 18.5% of new accounts, up from 16.1% a year prior.
Why it matters
Banks have eased underwriting standards to pursue growth after card delinquency and charge-off rates declined consistently for more than a year. While approval volume is up, lenders are managing risk by keeping the average size of new credit lines relatively modest.
Consumers with credit scores under 660 secured 18.5% of new credit card accounts in the second quarter of 2026. While the median credit line for these borrowers increased from $500 to $600, the overall average new credit line across all segments declined to $6,066.
The players
Philadelphia Fed
A regional bank of the Federal Reserve System that monitors banking activity and publishes economic insights to inform financial market participants.
The details
Lenders are utilizing advanced underwriting technologies, including verified bank transaction data, to identify creditworthiness beyond traditional scores, which has boosted approvals by up to 8% for underserved segments. By simultaneously reducing the average size of new credit lines, banks are successfully growing their customer base while limiting the dollar amount of potential loss exposure. This approach allows institutions to tap into the 17% of U.S. consumers categorized as subprime without reverting to the higher-risk lending habits of the past.
Timeline
Q2 2025 served as the baseline period for year-over-year growth comparisons.
The second quarter of 2026 marked the period of increased credit access.
October 7, 2026, saw the publication of the Philadelphia Fed Q2 2026 Insights Report.
Money Landscape
The current expansion of credit access follows several years of tight underwriting and builds upon a financial cycle where consumer repayment habits have shifted since the 2021 peak in full-balance payments. Banks are now balancing this 37% pay-in-full rate against the need for portfolio growth.
If you have a lower credit score, you may find it easier to qualify for a new card, but keep in mind that initial credit limits are currently being set conservatively. You should regularly review your credit report and speak with a financial professional about whether taking on new debt aligns with your long-term budget goals.
The takeaway
Banks are currently prioritizing volume over individual limit size to safely capture market share among subprime borrowers. If you are applying for a new card, review your current credit score and prepare to advocate for higher limits once you have established a consistent history of on-time payments.
Further reading
For more information on how financial institutions manage risk and eligibility, visit the Credit Cards section.
Source note: This article includes information reported by PYMNTS.
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