By PYMNTS | October 13, 2026
Highlights
Low-score borrowers accounted for 18.5% of card originations at large banks in the second quarter, up from 16.1% a year earlier.
Median new lines for borrowers with credit scores below 660 rose to $600 but remained below the $7,000 median for borrowers at 720 or higher.
PYMNTS Intelligence found that 35% of subprime consumers hold neither a credit nor store card.
Large banks are putting more credit cards into the hands of consumers with low credit scores, but they are not pairing that expansion with large amounts of new borrowing capacity.
The combination indicates how card issuers are pursuing growth after several years of tight underwriting. Rather than making a broad shift toward looser credit standards, banks can approve more consumers while controlling their exposure through the size of each credit line.
The Federal Reserve Bank of Philadelphia’s “Q2 2026 Insights Report,” published Wednesday (Oct. 7), found that consumers with credit scores below 660 accounted for 18.5% of new credit card accounts at large banks in the second quarter, up from 16.1% a year earlier. The number of new card accounts across the banks rose nearly 4%, while total dollar originations increased 1.5%. As account growth outpaced commitments, the average new credit line declined from $6,216 to $6,066.
The read-across is that banks are reaching further down the credit spectrum without committing the same amount of money to each newly opened account.
The Philadelphia Fed’s data showed that median credit lines did not decline within the individual credit score groups. The median line for borrowers below 660 increased from $500 to $600, while the median for consumers between 660 and 720 rose from $2,600 to $2,700. The median for borrowers at 720 or higher remained at $7,000. The decline in the overall average partly reflects the larger share of new accounts going to lower-score borrowers, whose lines tend to be smaller.
We’d love to be your preferred source for news.
Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!
Credit Access Meets Credit-Line Control
At the same time, PYMNTS Intelligence found that many consumers remain outside the card market.
“Who Is the Subprime Consumer? A Behavioral Profile,” a May PYMNTS Intelligence report, revealed that 17% of consumers in the United States, or roughly 44 million adults, fell into the subprime category. Of those subprime consumers, 35% held neither a credit nor store card, compared with 12% of prime consumers and 4% of super-prime consumers.
A small initial credit line may serve a duality of purpose here. For the bank, the line caps the amount immediately exposed to a newly approved borrower. For the consumer, an approval creates access to revolving credit and a payment history that can lead to a thicker credit profile.
Underwriting developments, marked by new technologies, add another element to the equation. Personify Financial said verified bank transaction data increased approvals by as much as 8% among underserved consumer segments while maintaining credit costs, PYMNTS reported Oct. 6. Affirm’s latest underwriting model produced 3.4% more completed purchases at comparable risk, while Plaid said its LendScore model delivered 25% better predictive performance than traditional credit data alone. These are different products and underwriting methods, but each illustrates how lenders are seeking finer measures of risk rather than relying solely on broad borrower categories.
Underwriting determines who receives an account. The initial line determines how much exposure the issuer accepts, and subsequent line management gives the lender another opportunity to respond as repayment and spending behavior develop.
The credit environment gives banks room to test that approach. The Philadelphia Fed reported that card delinquency and net charge-off rates at large banks have declined for more than a year. At the same time, the share of accounts paying balances in full reached 37% in the second quarter, matching the pandemic-era peak recorded in 2021. Banks can widen the pool of consumers receiving cards, observe how these accounts perform and adjust exposure over time.