Subprime cards are up 160 percent in the past five years
New credit card accounts are continuing to climb, and are nearing pre-recession levels.
According to the American Bankers Association’s latest Credit Card Market Monitor, the number of new card accounts in the first quarter of 2016 totaled 83.5 million, making it the highest reading of first-quarter data since the recession that began in December 2007. At a 13 percent gain over the previous year, it’s also the most substantial year-over-year new card growth we’ve seen since 2012.
One result is that the total number of open cards is quickly approaching its 2008 recession-era figure, with 337 million total card accounts open in 2016’s first quarter versus 344 million in 2008’s first quarter.
The financial crisis prompted card issuers to sharply cut new accounts, starting in 2008. The valley for new card accounts dipped to its lowest point in 2011. In the five years since, the number of new cards has climbed every year and now has almost doubled since the low-water mark.
Defined as those opened within the last 24 months, new card accounts have increased in all risk tiers. Subprime and prime accounts drove most of the growth, with respective gains of 160 percent and 115 percent over the five-year period. This aligns with reports that card issuers continue to look for opportunities to extend credit to millennials and other consumers with limited credit histories.
The American Bankers Association releases its Credit Card Market Monitor every quarter, drawing on data from a nationally representative sample provided by Argus Information Services. Its report on 2016 first quarter data was released Aug. 4.