News

U.S. credit card market expansion continues through Q3

January 30, 2019

Credit card use continued to increase from the second to the third quarter of 2018, with purchase volumes increasing for sub- and super-prime accounts, but moderating for prime accounts. 

These statistics come from the most recent Credit Card Market Monitor, published quarterly by the American Bankers Association. The January 2019 Monitor, which consists of credit card data from July through September 2018, also found that the total number of credit card accounts continued to rise, but at a slower year-over-year pace. 

"Consumer spending remains a major bright spot in the U.S. economy, and elevated consumer confidence levels coupled with stronger wage growth should keep spending healthy, at least through early 2019," Jess Sharp, executive director of the ABA Card Policy Council, said in a press release. "At the same time, there is evidence that issuers may be starting to pull back a bit."

Third quarter data also show that the share of transactors (i.e., those who pay their balance in full each month) fell 0.2 percentage points to 30.2 percent. Still, this level marks the second-highest reading for this metric since ABA began tracking it in 2008. 

Credit card credit outstanding as a share of disposable income rose 4 basis points to 5.42 percent in Q3, but remains 200–300 basis points below pre-recession levels and has seen little growth over the past six years. 

Meanwhile, the effective finance charge yield (which measures interest payments relative to total outstanding credit) increased 24 basis points to 12.80 percent in the third quarter. 

This metric has increased at a slower pace than the Fed's benchmark interest rate, suggesting that an improvement in consumers' ability to manage credit card debt has partially offset rising interest rates, the ABA release said. 

View the full report with detailed charts and statistics.