Americans Use Credit Cards More in Second Quarter
WASHINGTON – Americans used their credit cards to spend more during the second quarter. That and a tighter labor market reflect a strengthening economy, the American Bankers Association reported Tuesday.
The Credit Card Market Monitor of the bankers association shows that during April, May and June, purchase volumes were 5.1% higher than the same quarter in 2015 for subprime accounts, 6.9% for prime accounts and 8.3% for super-prime accounts.
Subprime accounts constitute only 20% of all credit card accounts, down from 28% in 2009 and a level that has held steady the last four years, the ABA noted.
This month’s Credit Card Market Monitor, the ABA said, found that the number of new-card accounts rose to 84.9 million, up 11% from the year-ago quarter, and that this “steady growth in new accounts contributed to a new post-recession high of 342 million total open credit card accounts.”
“Consumer spending was strong in the second quarter,” said Jesse Sharp, executive director of the card policy council of the trade association, a trend he attributed to “an improving labor market and steadily rising wages.”
Along with Americans using their credit cards more, “consumers are not over-leveraged with respect to credit card spending,” the ABA said. Translation: Consumers can handle the debt they’ve taken on.
“Short-term credit card debt remains very low relative to income,” Sharp said in his prepared statement. “Consumers continue to watch their finances carefully and avoid overextending even as their financial means improve.”
Copyright 2022 The Business Journal, Youngstown, Ohio.