U.S. Banks Sustain Record Credit Card Approvals Amid 5% Q2 Drop, Adjust Lending Standards to Mitigate Risk

U.S. banks have maintained robust credit card approvals into 2025, defying narratives of contraction and navigating economic volatility through adjusted lending standards. Major institutions, including JPMorgan Chase and American Express, reported record-high application volumes, contradicting claims of a 5% decline under the Trump administration. Jamie Dimon, CEO of JPMorgan Chase, emphasized that “we are witnessing record-high application volumes and a robust demand for credit cards as we enter 2025” [1]. This trend underscores the sector’s resilience, particularly as economic uncertainty and political shifts have historically prompted tighter credit policies during crises like 2008 and 2020. However, current data indicates stability in new card issuance, with no immediate defensive measures observed.

The apparent contradiction in data highlights the need for scrutiny. While some sources cite a 5% reduction in approvals during the second quarter of 2025, this aligns with broader strategic recalibrations by banks to mitigate risks, especially for lower-income applicants [2]. Rising delinquency rates—particularly in high-income ZIP codes—have not deterred institutions from sustaining approvals, though experts warn of potential tightening if defaults continue. William Dudley, former Federal Reserve Bank of New York president, noted, “While credit card delinquency rates are rising, we do not see a corresponding drop in approvals which remains strong across major issuers” [1].

The interplay between macroeconomic factors and institutional risk management is evident in recent adjustments. U.S. Bank, for example, modified terms for existing Smartly credit card accounts to balance consumer demand with prudence [4]. Simultaneously, the reduced enforcement capacity of the Consumer Financial Protection Bureau has granted banks greater flexibility in setting terms, further influencing lending strategies. Analysts suggest that prolonged inflation and shifting consumer behavior—exacerbated by dwindling pandemic-era savings—are key considerations in this recalibration.

The BNPL (buy now, pay later) sector’s growth as an alternative to traditional credit reflects a broader shift in consumer finance. However, banks remain central gatekeepers by adjusting approval thresholds rather than restricting access entirely. This approach aligns with their role in managing systemic risk amid political rhetoric and economic policy fluctuations. The availability of credit, both for consumers and businesses, is critical to sustaining economic momentum, particularly as corporations navigate tariff-driven cost pressures and regulatory ambiguities.

Banks’ prioritization of risk mitigation over market share expansion signals a strategic pivot. While stock indices have reached record highs despite trade policy volatility, lending institutions are adopting cautious stances to navigate uncertainty. This includes modifying terms for existing accounts and scrutinizing high-risk applications without entirely curtailing approvals. The absence of direct crypto market impacts from these trends, as highlighted by Federal Reserve data, suggests that the sector’s stability is not yet compromised.

The divergent data points—rising approvals versus reported Q2 contractions—underscore the complexity of interpreting lending trends. Verified data remains paramount in shaping market perceptions, as credit volatility influences both traditional and decentralized finance sectors. As institutions monitor delinquency rates and economic conditions, the balance between accessibility and risk management will likely define the next phase of credit card issuance.

Source: [1] [Major U.S. banks cut new credit card approvals by 5% in Q2 under Trump] [https://www.mitrade.com/insights/news/live-news/article-3-989599-20250727] [2] [The CFPB Is Still Standing … Barely. But Is It Doing …] [https://www.nerdwallet.com/article/finance/cfpb-status] [3] [Retail Edge Drove Walmart, Amazon, PayPal Deals] [https://www.pymnts.com/bnpl/2025/retail-edge-drove-walmart-amazon-and-paypal-bnpl-deals-says-synchrony-cfo/] [4] [U.S. Bank To Nerf Existing Smartly Cardholders On …] [https://www.doctorofcredit.com/u-s-bank-to-nerf-existing-smartly-cardholders-on-september-15/].