For Immediate Release
November 1, 2016
ABA Media Contact: Jeff Sigmund
(202) 663-5439
Email: jsigmund@aba.com
Follow us on Twitter: @ABABankers

ABA Report: Credit Card Market Continues Steady Expansion in Second Quarter

​WASHINGTON — The credit card market continued to expand in the second quarter amid a tightening labor market and robust consumer spending, according to the American Bankers Association’s latest Credit Card Market Monitor. Monthly purchase volumes rose 5.1 percent for subprime accounts, 6.9 percent for prime accounts and 8.3 percent for super-prime accounts in the second quarter compared to the same period a year earlier.

2016Q2CreditCardMonitor.JPGThe November 2016 Monitor, which reflects credit card data from April – June, also found that the number of new credit card accounts rose to 84.9 million, up 11.0 percent from a year earlier. The steady growth in new accounts contributed to a new post-recession high of 342 million total open credit card accounts.
 
“Consumer spending was strong in the second quarter, driven in part by an improving labor market and steadily rising wages,” said Jess Sharp, executive director of ABA’s Card Policy Council. “As consumers continue to gravitate toward credit cards, it’s no surprise that purchase volumes and account openings are on the rise.”
 
Consumers Effectively Manage Credit Card Debt
 
Although credit card use is increasing, the report’s findings suggest that American consumers are not overleveraged with respect to credit card spending. For example, the share of Transactor accounts (account holders who pay off their balances in full each month) rose 0.7 percentage points to 29.5 percent of all accounts — near a post-recession high.  Moreover, credit card credit outstanding relative to real disposable income sits at 5.23 percent — in line with post-recession lows.
“Even as card use increases, the amount of short-term credit card debt consumers carry remains very low relative to income,” said Sharp.  “Consumers continue to watch their finances carefully and avoid overextending even as their financial means improve.”

Issuers Serving More Consumers

The latest report demonstrates the extent to which credit card issuers continue to manage risk while also expanding access to credit.  For example, while the number of new credit card accounts rose to a new post-recession high of 84.9 million, subprime accounts comprised just 20 percent of this amount — down from 28 percent in early 2009 and virtually unchanged for the last four years.  In addition, the average credit line for a subprime account has risen slowly (7 percent) over the last three years, and remains 25 percent below post-recession levels. 
                                                                   
The full report with detailed charts and 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 all accounts based on actual credit card account information.  No individual account holder’s information or specific financial institution’s 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 in an Appendix attached to the monitor.
 
Results of this and all previous reports can be found at www.aba.com.
 
The American Bankers Association is the voice of the nation’s $16 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $12 trillion in deposits and extend more than $8 trillion in loans.
 
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