Access to credit is essential for financial stability and upward mobility. Credit enables people to buy homes and cars, start businesses, pursue education, and manage emergencies. It also helps individuals build credit histories that unlock future financial opportunities.

Lenders provide credit to borrowers across a range of risk levels. Higher-risk borrowers, often with limited credit history or unstable income, typically pay higher interest rates. These higher rates allow lenders to extend credit more broadly while managing risk, expanding access through tools like starter and secured credit cards.

Many communities have faced long-standing barriers to credit due to discrimination and structural inequality. Women were denied independent credit access until the 1970s, limiting their ability to build financial independence. Black and Latino communities were impacted by Jim Crow laws, redlining, and discriminatory implementation of policies like the GI Bill, restricting access to banking, homeownership, and wealth-building opportunities. Rural communities continue to face challenges due to lower incomes and “bank deserts” caused by branch closures.

These barriers have made underserved groups more vulnerable to predatory lending, which are loans with deceptive terms, excessive interest rates, or structures that trap borrowers in debt. While outlawed, the long-term effects of these practices persist today.

Credit access has improved over time. A key turning point came in 1978, when interest rate deregulation made it viable for banks to lend to higher-risk borrowers nationwide. Since the 1990s, subprime loans and entry-level credit cards have helped consumers and small businesses build credit, despite higher interest rates.

Credit cards now play a major 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. According to a study by the Consumer Bankers Association, credit card spending makes up a fifth of the GDP in America.

Community banks also support access by offering relationship-based lending that considers local knowledge and borrower character, helping serve small businesses and underserved communities where large institutions may not be able to.