Americans are struggling to get a loan since the Fed started raising rates
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Americans are having a harder time getting approved for loans and other financial products nearly two years after the Federal Reserve began aggressively hiking interest rates,
A new survey published by Bankrate found that 50% of loans or financial product applicants have been denied since the Fed started raising rates in March 2022.
Credit card applications have been rejected the most frequently, with 14% of Americans reporting that banks denied them a new credit card while another 6% were refused a balance transfer card. Others were denied a credit limit increase on their existing credit card (11%), a personal loan (10%), car loan or car lease (9%), insurance (8%) and a mortgage loan (5%).
Banks are tightening their lending standards in response to higher interest rates.
HIGH INFLATION IS STILL SQUEEZING AMERICANS' BUDGETS
People walk past a Wells Fargo bank on Broadway on Dec. 20, 2022, in New York City. (Photo by Michael M. Santiago/Getty Images / Getty Images)
Fed policymakers have raised interest rates sharply over the past two years, approving 11 rate increases in the hopes of crushing inflation and cooling the economy. In the span of just 16 months, interest rates surged from near zero to above 5%, the fastest pace of tightening since the 1980s.
Hiking interest rates tends to create higher rates on consumer and business loans, which then slows the economy by forcing employers to cut back on spending. Higher rates have helped push the average rate on 30-year mortgages above 8% for the first time in decades. Borrowing costs for everything from home
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