New credit card accounts rose 11 percent year-on-year in the second quarter of 2016 to total 84.9 million, according to the latest edition of the American Bankers Association’s Credit Card Market Monitor released today. The total number of credit card accounts continued to climb to a post-recession high of 342 million. Healthy consumer spending and a tightening labor market contributed to the increase.
“Consumer spending was strong in the second quarter, driven in part by an improving labor market and steadily rising wages,” said ABA SVP Jess Sharp. “As consumers continue to gravitate toward credit cards, it’s no surprise that purchase volumes and account openings are on the rise.” Sharp noted that the amount of debt carried relative to disposable income is low by historical standards at 5.23 percent. The share of account holders carrying over a monthly balance dipped by 1.1 points to 42.5 percent of all accounts.
The report showed that card issuers are continuing to expand access to credit, particularly consumers with lower credit scores or limited histories. The number of new subprime accounts grew by 19 percent to 25 million, while new prime accounts grew by 16 percent and new super prime accounts by 3.3 percent. However, average credit lines for new accounts grew most in the super prime category, at 1.7 percent, while rising only 0.2 percent for new subprime accounts.