Demand for new credit cards in the US is down to its lowest level since 2013.

Specifically, the proportion of US households applying for a new credit card is down by 10 percentage points to 16%.

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A Federal Reserve survey notes that most credit application and acceptance rates fall sharply with the onset of the pandemic. Application and acceptance rates for credit cards and credit limit increases show the largest declines followed by auto loans. However, the application rate for mortgage refinancing continues to climb throughout 2020. This is driven by demand from borrowers with high credit scores (above 760).

Respondents also report a lower average probability of being able to come up with $2,000 in an emergency. That figure now stands at 65.6%, a new series low.

Other key takeaways from the survey include:

Application rates fall by 11 percentage points

Reported application rates for any kind of credit over the past 12 months dropped 11 percentage points (or 24%) over the course of 2020, slipping from 45.6% in February to 34.6% in October, a new series low.

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The decline is broad-based across credit score and age groups, but largest for those with credit scores below 760 and those aged 60 or older. Overall, the average 2020 application rate of 39.8% is well below the 2019 average of 45.8%.

Reported rejection rates among applicants increase by 3.8 percentage points (or 27%) during 2020 from 14.2% in February to 18.0% in October. The increase is largest for respondents with scores under 680, consistent with a general tightening of lending standards since February.

Overall, the average 2020 rejection rate of 15.7% is moderately below its 2019 level of 17.6%. The share of respondents who were too discouraged to apply for credit over the past 12 months (despite needing it) increases slightly, rising from 6.9% in February to 7.2% in October. The 2020 average of 7.0% is slightly above the 2019 average of 6.4%.

Credit limit increase applications fall

The application rate for credit card limit increases drops by 6.6 percentage points (or 48%) since February to 7.1% in October, the lowest level since the start of the series in October 2013. The decline is broad-based across age and credit score groups.

Application rates for auto loans declines by 3.2 percentage points (or 22%) since February to 11.6% in October, a new series low. The decline is largest for those with credit scores above 760 and those aged 60 or older.