Credit Card Market Expands in Second Quarter

New credit card accounts totaled 91 million in the second quarter of 2017, according to the latest edition of the American Bankers Association’s Credit Card Market Monitor released today. Monthly purchase volumes rose by 9 percent across all risk tiers (subprime, prime and super-prime), following a seasonal decline in the first quarter. Year-on-year, purchase volumes rose 4.9 percent for prime accounts and 5.2 percent for super-prime accounts, but fell 1 percent for subprime accounts.

Credit access continued to expand in the second quarter, with the total of new accounts increasing by 7.2 percent year-on-year. New subprime account grew at 7 percent year-on-year — noticeably slower than in the previous quarter, when growth rates reached 11 percent. New prime accounts also grew at their slowest annual rate in more than three years.

“While the credit card market continues to expand, issuers appear to be tapping the brakes on new account creation for prime and subprime borrowers,” noted ABA SVP Jess Sharp. “Issuers always look carefully at performance across all categories of borrowers to assess risk and determine the pace of credit card offerings.” Sharp added that recent growth in the credit card market mirrors improvements in the overall economy.

Outstanding credit card debt as a share of disposable income increased 13 basis points to 5.46 percent, remaining in line with post-recession loans. The share of account holders carrying a monthly balance ticked down 1 percentage point to 43 percent, reaching the lowest level in a year. The share of account holders paying off their balances each month rose 0.6 points to 29.4 percent of all accounts, while 27.5 percent of all accounts were dormant.