Credit card monthly purchase volumes increased in the fourth quarter of 2020, rising 7% for super-prime accounts, 8.6% for prime accounts and 8% for subprime accounts from the last quarter, 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 (transactors) each month rose 1.4 percentage points to 35.1%, a record high for the third straight quarter. The share of account holders carrying a monthly balance (revolvers) declined 1 percentage point to 39.7%, a record low.
“As 2020 came to a close, consumers were generally flush with cash after months of conservative spending and multiple rounds of federal Economic Impact Payments,” said ABA Senior Economist Rob Strand. “The growing share of transactors and shrinking share of revolvers underscores the strong liquidity position of consumers as the economy was beginning to rebound.”
The total number of accounts declined year-over-year, driven by a 14.2% decline in prime account credit lines. The total number of subprime accounts declined 7.3% and the number of super-prime accounts declined 8.8%. The total number of new accounts (those opened in the previous 24 months) fell 6.8% to the lowest level in six years.