Fourth-quarter credit card spending continued rising on strong employment numbers and the strength of the super-prime credit market, according to the latest edition of ABA’s Credit Card Market Monitor released today. Prime account spending rose by 0.9 percent and super-prime account purchases increased by 2.4 percent — double the pace of the third quarter. Subprime purchase volumes fell by 1.7 percent, however. The share of borrowers who pay off their balances each month rose by half a point to 29.2 percent of all accounts.
“The credit card market continued to gain steam even as economic growth slowed at the end of last year,” said ABA SVP Molly Wilkinson. “Looking ahead, steady employment gains and wage growth make it likely that credit card markets will continue to expand throughout 2015.”
New account volume rose 14 percent year-on-year, driven mostly by growth in subprime and prime accounts. The average credit line for new accounts fell slightly for subprime accounts and increased 2.7 percent for super-prime accounts and 1.7 percent for prime accounts. “While average credit lines for subprime borrowers remain constrained due to both regulatory and economic factors, these customers continue to make up a growing share of new accounts,” Wilkinson said, adding that “offering lower initial credit lines that can increase over time with a good payment record is consistent with a healthy consumer credit card market.”