As consumer spending and credit card purchases plummeted in the second quarter, the share of U.S. cardholders that paid their credit card balance in full reached record levels, according to the American Bankers Association’s latest Credit Card Market Monitor released today.
The share of account holders who paid their balance in full each month rose 0.6 percentage point to a record high of 32.2%, while the share of account holders carrying a monthly balance declined 2.2 percentage points to 42.4%, the lowest level since the fourth quarter of 2015.
“The share of those paying their monthly card balance in full rising to an all-time high is a positive indication that many consumers are better positioned to weather the economic downturn triggered by the pandemic than first expected,” said ABA Senior Economist Rob Strand.
The total number of accounts declined year over year for the first time since 2012 in the second quarter driven by a 3.6% drop in subprime accounts and a 3% decline in prime accounts.
The total number of new accounts (opened in the previous 24 months) fell in the second quarter across risk tiers, with subprime accounts falling 6%, prime dropping 4.4% and super prime accounts dipping 2.5% year over year.