Credit Card Use Moderates in First Quarter

Credit card use moderated in the first quarter of 2019, according to the American Bankers Association’s latest Credit Card Market Monitor released today. Monthly purchase volumes declined across risk tiers from the previous quarter. Year-on-year, purchase volumes were up 5.2% among super-prime and 4.3% among subprime accounts, while prime accounts remained unchanged.

The total number of new accounts (opened in the previous 24 months) fell by 5% year-on-year, reflecting sharp decreases in new subprime and prime accounts. Meanwhile, the total number of credit card accounts increased 1.9% compared to a year ago, driven mostly by growth in the super-prime risk tier. Average credit lines for all accounts increased modestly across all risk tiers, but remained well below recession-era peaks.

“Weaker consumer spending and slower monthly job growth likely contributed to modestly lower monthly purchase volumes,” said ABA SVP Dan Smith. “Issuers are also continuing their cautious approach in extending credit.”

Outstanding credit as a share of disposable income eased 3 basis points to 5.4% in the first quarter, remaining largely unchanged over the last five quarters. The share of account holders carrying a monthly balance rose 0.1%. The share of account holders who paid off their balance in full each month fell by 0.3%, but remains its highest level in more than a decade.