Major U.S. banks cut new credit card approvals by 5% in Q2 under Trump policies

Major U.S. banks reported a 5% decline in new credit card account approvals during the second quarter of 2025, marking the first annual drop in over a year, according to earnings data from leading card issuers [1][2]. This trend reflects a broader tightening in consumer credit expansion, with analysts attributing the shift to heightened economic uncertainty and shifting regulatory dynamics under the Trump administration. The reduction in approvals underscores a cautious approach by financial institutions amid macroeconomic volatility and evolving policy frameworks.

The 5% decline aligns with broader industry signals of restrained credit activity. For instance, First Financial Bancorp’s Q2 results highlighted a 5% year-over-year revenue increase to $226.3 million, though this growth was driven by existing accounts rather than new lending [3]. Meanwhile, WaFd Bank’s president noted weakened loan demand and market uncertainty as key challenges for lenders in 2025 [4]. These developments collectively indicate a sector recalibrating to balance risk management with growth objectives.

The decline in credit card approvals also coincides with Trump’s recent trade policy actions, including a 36% tariff on exports from Cambodia and Thailand [5]. While this policy is unrelated to the credit card sector, it highlights a regulatory environment characterized by high-stakes economic interventions, which may influence consumer and business confidence. However, the direct link between Trump-era trade measures and the 5% drop in credit card approvals remains speculative and unproven, as the data provided does not establish causality.

The contraction in new credit card accounts reflects broader trends in financial services. For example, BlackRock recently diverged from Wall Street consensus by advocating for Federal Reserve rate cuts, while most analysts expected modest earnings growth for the S&P 500 in Q2 [6]. Such diverging views underscore the complexity of navigating current market conditions, where policy shifts and economic data points create ambiguity for institutions and consumers alike.

The 5% drop in credit card approvals also contrasts with performance in other sectors. Intel, for instance, reported unexpected Q2 earnings but saw its shares decline sharply following announced job cuts [7]. This juxtaposition highlights the varied responses across industries to macroeconomic pressures, with consumer finance facing unique challenges tied to credit risk assessments and regulatory scrutiny.

The shift in credit card approvals may have long-term implications for financial institutions. Historically, credit card growth has been a key revenue driver for banks, but the current pause suggests a strategic pivot toward risk mitigation. This aligns with broader industry themes of prioritizing asset quality and capital preservation, particularly in a low-interest-rate environment where alternative profit streams are limited.

While the 5% decline is significant, it is essential to contextualize it within a year marked by unprecedented economic conditions. The Trump administration’s trade policies, coupled with global supply chain adjustments, have created a backdrop of uncertainty that influences both consumer behavior and institutional strategies. However, the extent to which these factors directly impact credit card approvals remains subject to further analysis.

In summary, the 5% drop in new credit card approvals by major U.S. banks in Q2 2025 signals a strategic recalibration in response to evolving economic and policy landscapes. As financial institutions navigate this environment, their ability to balance risk and growth will be critical in shaping the sector’s trajectory.

Source: [1] [title1Major U.S. banks cut new credit card approvals by 5% in Q2 under Trump] [url1https://www.mitrade.com/au/insights/news/live-news/article-3-989599-20250727] [2] [title2Major U.S. banks cut new credit card approvals by 5% in Q2 under Trump] [url2https://cryptorank.io/news/feed/5e33f-trump-threatens-cambodia-thailand-tariffs] [3] [title3Earnings call transcript: First Financial Bancorp beats Q2 2025 forecasts] [url3https://www.investing.com/news/transcripts/earnings-call-transcript-first-financial-bancorp-beats-q2-2025-forecasts-93CH-4153963] [4] [title4Loans: WaFd Bank president on weak loan demand] [url4https://www.cnbc.com/loans/] [5] [title5Trump lifts tariff baseline rate, warns countries face 15-50%] [url5https://finance.yahoo.com/news/live/trump-tariffs-live-updates-eu-readies-its-reprisals-as-trump-pushes-for-higher-tariffs-200619060.html] [6] [title6Puma plunges, Deckers beats, Intel sags amid cost cuts] [url6https://finance.yahoo.com/news/live/earnings-live-second-quarter-earnings-season-kicks-off-with-big-banks-leading-the-way-205852940.html] [7] [title7Intel shares fall sharply after announcing job cuts and posting unexpected Q2 earnings] [url7https://www.msn.com/en-us/money/companies/intel-shares-fall-sharply-after-announcing-job-cuts-and-posting-unexpected-q2-earnings/ar-AA1Jhdcl?ocid=finance-verthp-feeds]