ABA report: Credit card market recovery continued in Q4 2021

In a sign of continuing U.S. consumer strength, monthly credit card purchase volumes rose across risk tiers in last year’s fourth quarter, the third consecutive increase, according to the American Bankers Association’s latest quarterly Credit Card Market Monitor released today.

Monthly purchase volumes rose 4–6% across risk tiers compared to the previous quarter. Purchase volumes were 23–27% above year-earlier levels, and although high inflation was partly responsible for the spending increase, inflation-adjusted monthly purchase volumes also rose across risk tiers on a quarterly and annual basis. The effective finance charge yield, which measures interest payments relative to total outstanding credit in the market, fell another nine basis points to 12.01%, a four-year low.

“The strong labor market allowed consumers to continue driving the economy forward,” said ABA Chief Economist Sayee Srinivasan. “While the U.S. economy is dealing with higher inflation and consequently rising interest rates, as evidenced by credit card debt as a share of disposable income, U.S. households’ balance sheets remain robust to help absorb shocks from these headwinds.”