Credit Squeeze Is Driving Down Spending for Low-Score Americans

Credit-card purchases in the US economy have increasingly been driven by borrowers with high scores, as less creditworthy consumers cut back on spending, a new report from the Federal Reserve Bank of Philadelphia shows.

Purchasing volume by borrowers with credit scores of 720 and above — the highest tier in the survey — has held at roughly the same levels since 2023 after adjusting for inflation, according to the Philly Fed’s Large Bank Credit Card and Mortgage data for the second quarter of this year, published Friday. In straight dollar terms the series hit a record high.