New credit card accounts rose 10.7 percent year-on-year in the third quarter of 2016 to total 87.3 million, according to the latest edition of ABA’s Credit Card Market Monitor released today. As the labor market continued to tighten and consumption levels rose, monthly purchase volumes increased between 6 and 9 percent across all risk tiers (subprime, prime and super-prime).
“The U.S. economy is gaining strength, labor markets continue to firm and wages are up nearly 3 percent from a year ago,” said ABA SVP Jess Sharp. “Consumers were the primary driver of economic growth in 2016, and growth in new credit card accounts and purchase volumes is in line with broader economic trends.”
Credit access continued to expand in the third quarter; the number of new subprime accounts grew by 27 million, while new prime accounts grew by 29 million and super-prime by 31 million. Sharp added that consumers are continuing to manage their debt responsibly — outstanding credit card debt as a share of disposable income remained near post-recession lows at 5.3 percent.
The report also noted that consumers are increasingly using credit cards for short-term financing. The share of account holders carrying a monthly balance edged up 0.8 percent to 43.3 percent of all accounts, approaching a four-year high but still remaining well below post-recession highs. The share of account holders that pay off their balances in full each month dipped 0.3 percent to 29.2 percent of all accounts.
