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Access to credit is an important tool for financial stability and upward mobility. Lines of credit help make it possible for individuals and families to buy homes and cars, start businesses, pursue their education, and manage emergencies such as medical bills or unexpected car or home repairs. Just as important, the use of credit helps individuals build credit histories that unlock lower borrowing costs and greater financial opportunity over time.
Access to credit hasn’t always been widely available, and many Americans have suffered economic hardship as a result. People living in rural areas have historically experienced disproportionate rates of “credit invisibility” compared to the rest of the country, and have the highest utilization of high-cost, non-bank lending products like pawn shops and payday loans. Women were denied independent credit access until the 1970s, limiting their ability to buy homes, start businesses or build financial independence on their own. Jim Crow laws and redlining restricted access to banking, homeownership, and wealth-building opportunities for Black as well as Hispanic communities for decades. Together, these barriers have made lower-income Americans of all backgrounds more vulnerable to predatory lending. Predatory loans are loans with deceptive terms, excessive interest rates, or structures that trap borrowers in debt. While many of the worst and most unethical practices of these types of lenders have been outlawed, many of them still persist today.
Despite this, credit access has improved over time. A key turning point was the Supreme Court’s 1978 decision in Marquette National Bank of Minneapolis v. First of Omaha Service Corp., when efforts to streamline interest rate policy made it viable for banks to lend to a more diverse range of borrowers and those with less than perfect credit nationwide. In the decades that followed, innovations such as risk-based pricing, credit scoring, and entry-level credit cards have dramatically helped consumers and small businesses build credit. These changes have enabled millions of Americans to:
Credit cards now play a central role in expanding access, allowing consumers to borrow flexibly, build credit through responsible use, and increase credit limits over time. Today, about 80% of Americans have a credit card and roughly 50% of businesses rely on credit cards as a source of financing. According to a study by the Consumer Bankers Association, credit card spending makes up one-fifth of the GDP in America. These figures underscore the importance of credit cards to both households and the broader economy.