<br><div><aside class="gnt_em gnt_em__fp gnt_em_vp__tp gnt_em__el" aria-label="Video - US economy masks credit crisis as debt hits millions"/><p class="gnt_ar_b_p">Half of Americans who applied for loans in the past two years were turned down, according to a<a target="_blank" href="https://www.bankrate.com/finance/credit-cards/credit-denials-survey/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> new survey</a> from the personal finance site <a target="_blank" href="https://www.bankrate.com/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener">Bankrate.com</a>.</p><p class="gnt_ar_b_p">That finding comes at a time when banks have been tightening rules for lending money to consumers. Interest rates have spiked dramatically since 2022, as the Federal Reserve battles inflation.</p><p class="gnt_ar_b_p">According to the new Bankrate survey, the odds of getting approved for a loan today amount to a coin flip. Half of the applicants face denial, sometimes more than once. The survey, conducted by YouGov, covered 2,483 adults in January and February.</p><p class="gnt_ar_b_p">Unsuccessful borrowers most often reported getting denied a new credit card, or a credit-limit increase on an existing card. Others said they’d been turned down for personal or car loans.</p><figure class="gnt_em gnt_em_img"><img class="gnt_em_img_i" style="height:372px" fetchpriority="high" data-g-r="lazy" src="https://www.usatoday.com/gcdn/authoring/authoring-images/2024/02/28/USAT/72765630007-averageamericandebtstatisticse-1697089338311.jpg?width=660&height=372&fit=crop&format=pjpg&auto=webp" decoding="async" alt="According to a new Bankrate survey, the odds of getting approved for a loan today amount to a coin flip."/></figure><h2 class="gnt_ar_b_mt">Banks are tightening credit in response to sharply higher interest rates</h2><p class="gnt_ar_b_p">Banks have been tightening credit in response to the Fed's aggressive campaign to<a target="_blank" href="http://www.usatoday.com/story/money/2024/02/23/fed-interest-rate-cut-delay-cause-recession/72698385007/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> raise interest rates</a>. Between March 2022 and July 2023, the Fed lifted its benchmark rate from essentially zero to over 5%, a 22-year high.</p><p class="gnt_ar_b_p"><strong>Learn more:</strong> <a target="_blank" rel="noopener" data-t-l=":body nav (cd)|e|auto spike click:7|${u}" class="gnt_ar_b_a" href="https://www.usatoday.com/money/blueprint/banking/cds/best-cd-rates/">Best current CD rates</a></p><aside aria-label="advertisement" class="gnt_m gnt_x gnt_x__lbl gnt_x__al"/><p class="gnt_ar_b_p">The Fed raised rates to counter<a target="_blank" href="http://www.usatoday.com/story/money/2024/02/13/inflation-how-its-affecting-consumers-now/72576975007/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> inflation</a>, which reached a 40-year high of 9.1% in June 2022.</p><p class="gnt_ar_b_p">“I think the reason why credit is tighter today is how quickly rates turned around and surged,” said<a target="_blank" href="https://www.bankrate.com/authors/sarah-foster/" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> Sarah Foster</a>, a Bankrate analyst.</p><p class="gnt_ar_b_p">Higher interest rates prompted banks to restrict lending. In a Fed survey last summer, many banks said they had<a target="_blank" href="https://www.federalreserve.gov/data/sloos/sloos-202307-table-1.htm" data-t-l=":b|e|k|${u}" class="gnt_ar_b_a" rel="noopener"> tightened lending standards</a>. Almost no banks said...</p></div> <style> .wrapper { text-align: center; } </style> <div class="wrapper"> <a class="button" href ="https://www.usatoday.com/story/money/personalfinance/2024/03/05/banks-turning-borrowers-down-for-loans/72837780007/">Read more <span>➤</span></a> </div>
