Banks are giving cardholders more borrowing power. According to the Q4 2025 Insights Report from the Federal Reserve Bank of Philadelphia, credit card dollar originations — the total spending limit on all newly opened accounts — rose 9.6% year over year in the fourth quarter of 2025, and median credit limits increased by 4%.
Getting approved has gotten easier, but carrying a balance hasn’t gotten any cheaper, as annual percentage rates remain at historic highs.
[Read: Best Credit Cards]
Why Banks May Be Approving More Cards Now
Large banks have slightly loosened credit standards, and experts suggest they’re capitalizing on profitable growth while APRs are high and underwriting technology makes subprime approvals easier.
Extending more credit usually means banks are confident they can make money on it, says Nick Avila, founder of United Debt Relief.
“Easier approvals aren’t charity,” says Avila. “They’re a signal that the math works in the lender’s favor.”
The APR for general-purpose cards is 24.1%, and it’s 31.3% for private-label cards, according to the Federal Reserve report.
“A bank doesn’t need every borrower to pay on time to come out ahead when the interest is that high,” says Avila.
Technology has made it easier for banks to evaluate applications. Banks can use recent payment behavior and spending patterns to look beyond credit scores when evaluating potential cardholders.
Fair credit borrowers with credit scores below 660 made up 17.8% of new accounts, up 1.2 percentage points from a year earlier.
“Banks are dipping deeper into higher-risk segments as it offers higher yield,” says Terisa Roberts, global solution lead for risk modeling and decisioning at data and artificial intelligence provider SAS. “With the use of AI and real-time data, the cost of underwriting is lower than it has ever been.”
How Expanded Credit Access Can Help Consumers
More available credit is helpful for cardholders who are building credit or keeping balances low.
“For someone with no credit history, a card is one of the few on-ramps to a score, and that score touches everything from apartment applications to car insurance rates,” says Avila. “Used right, meaning the balance gets paid in full, a card is basically a free credit-building tool.”
A higher credit limit can lower your credit utilization if your spending stays the same. Cards can also offer benefits, including fraud protection, rewards and travel insurance. A 0% APR card or a balance transfer card can be used to save on interest, as long as you pay off the balance before the introductory period expires.
[SEE: Best Credit Cards to Build Credit]
Why Higher Limits Can Be Risky
Experts caution against treating new cards or higher limits like more money in your budget.
“A higher credit limit is not the same thing as having more money,” says Ashley F. Morgan, a debt and bankruptcy lawyer in Virginia. “It is simply access to more debt.”
Avila says a new card or higher limit is only helpful if you can take your balance to zero every month. Otherwise, he says, interest charges quickly compound and can quietly turn into long-term debt.
The interest rate doesn’t matter if you pay your credit card in full each statement period. But making only minimum payments can keep debt around for years — and interest can quickly offset any rewards you earn.
“Too many people focus on sign-up bonuses, points or cash back while ignoring the interest rate,” says Morgan. “Earning 2% or 3% back does not matter if someone is carrying balances at 25% or 30% interest rates.”
[Read: Low Interest Credit Cards]
Should You Apply for a New Credit Card?
A new card can make sense when you know how you’ll use it and have a plan to avoid interest — for example, building credit by making a few small purchases that you pay off when your statement is due each month. Using a 0% offer with a payoff plan can help you save on interest, and earning rewards or accessing benefits that outweigh the annual fee can help you come out ahead.
“A new card is a smart move when you pay in full, you’re building or protecting your score, or you have a real 0% window with a payoff plan that beats the deadline,” says Avila.
But opening a new card or getting a higher credit limit can make debt easier to carry. Before applying, review the APR, fees and promotional terms, and calculate whether the value of rewards or benefits is worth the cost. If you already carry balances, a new card could make room for more debt.
“I regularly talk to people who have never missed a payment, have credit scores in the 700s, but are carrying significant balances and have little to no emergency savings,” says Morgan. “Those consumers may still appear creditworthy even though they are under enormous financial pressure.”
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Banks Are Approving More Credit Cards. Is That Good News? originally appeared on usnews.com
