For Immediate Release
April 2, 2014
ABA Media Contact: Jeff Sigmund
(202) 663-5439
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ABA Report: Despite Increased Credit Card Spending, Consumers More Likely to Pay Off Monthly Balance

​WASHINGTON – Consumers are using credit cards more as a transactional tool to pay for goods and services than as a form of debt, according to the latest edition of the American Bankers Association’s Credit Card Market Monitor.   

The report, reflecting data from last year’s third quarter, found that monthly credit card purchase volumes generally increased while average ending balances fell nearly 5 percent.

“This suggests that consumers aren’t just using their credit cards more - - they are also more likely to pay off or pay down their monthly balance,” said Kenneth J. Clayton, executive director of ABA’s Card Policy Council.  “As a result, the amount consumers are paying in interest as a share of their outstanding credit card balance declined for the 13th consecutive quarter.”

This quarter’s Monitor found that while card demographics continue to change, people that have credit cards are spending more on discretionary goods and services.  Credit card spending at “discretionary” merchants rose 3.5 percent year-over-year, while spending at “nondiscretionary” merchants was up just 1.4 percent.  For example, spending at travel agencies (discretionary) rose 9.5 percent, while spending at drug stores (nondiscretionary) increased 1.8 percent.  Approximately 60 percent of credit card spending in last year’s third quarter occurred at merchants more likely to be associated with discretionary goods and services.  

“We’re seeing a more confident consumer who is willing to spend more money on non-essentials because they’re less concerned with the direction of the economy and their ability to keep debt at manageable levels,” Clayton said.  “Whether this trend will continue remains to be seen.”

The report also found that spending on rewards cards increased by 7.8 percent year-over-year for all risk categories.  It also rose for nearly all merchants, with rewards card spending for 26 out of the 27 merchant categories that ABA tracks. 

“This data suggests that the benefits of rewards cards are widely distributed among consumers and retailers,” Clayton said.  “The fact that rewards cards are associated with higher spending is beneficial both for retailers and the broader economy.”

The Monitor also found that credit availability remains constrained in certain segments of the credit card market.  While total credit lines increased by 4.6 percent year-over-year, the increase was entirely due to rising credit availability for super-prime accounts.  Credit lines for prime and sub-prime accounts continued to decline.  Prime and sub-prime accounts represent their smallest share of total credit lines in the last six years – down from 42 percent in 2008 to 32 percent in 2013. 

“Despite slowly easing credit standards and an improving economy, we continue to see a dramatic shift toward lower-risk accounts in the credit card space,” Clayton said.  “A more conservative approach by lenders, combined with regulatory constraints that make it more difficult to manage risk, has clearly played a role in this market shift.”

The full report, including charts and detailed statistics, is available here.

About the Credit Card Market Monitor
The American Bankers Association Credit Card Market Monitor is a quarterly report that provides key statistics on industry trends and relevant economic factors affecting the industry.  The credit card data used in the report is taken from a nationally representative sample provided by Argus Information Services LLC.  Credit card data are presented as national averages for new accounts less than 24 months old based on actual credit card account information.  No individual account holder information or specific financial institution data can be identified from the data set.  Other data used in the report are taken from various public and private sources, including the Department of Commerce’s Bureau of Economic Analysis and the Federal Reserve.

Answers to Frequently Asked Questions and definitions of the data presented in the ABA Credit Card Industry Monitor can be found here.
Results of this and all previous reports can be found at
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $14 trillion banking industry and its two million employees.  Learn more at