Credit card use picked up in the second quarter of 2018, according ABA’s latest Credit Card Market Monitor released yesterday. Monthly purchase volumes for super-prime accounts increased 9.2 percent year-on-year, while prime accounts rose 6.6 percent, both record highs. Subprime accounts saw slower year-on-year growth at 3 percent.
The total number of new accounts (opened in the previous 24 months) was down 3.5 percent compared to the same period a year earlier due a sharp drop in new subprime accounts. While the total number of open credit card accounts expanded year-on-year, growth is at its slowest pace in more than five years. Average credit lines among all accounts continued to rise for super-prime accounts, but fell for both prime and subprime accounts for the first time in a year.
“A strong economy, along with high confidence levels bolstered by more jobs and higher wages, continues to support healthy consumer spending,” said ABA SVP Jess Sharp. “The industry continues its diligent approach to credit underwriting, which is reflected most recently in declines in average credit lines for prime and subprime borrowers.”
Outstanding credit as a share of disposable income rose 3 basis points to 5.36 percent, hovering near post-recession lows. The share of account holders carrying a monthly balance fell 1 percentage point to 43.8 percent of all accounts, while those who paid off their balance in full rose to 30.4 percent. The share of dormant accounts was unchanged at 25.8 percent. Read the Monitor.