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Research and Statistics

Credit card purchase volumes surged in second quarter: ABA

Despite the growth in card spending, more Americans are paying off their balances in full, and fewer are carrying balances

Summary

Americans’ use of credit cards surged ahead to a record for seasonally adjusted credit card purchase volumes, according to the ABA. But it’s not necessarily ominous news. The share of cardholders who pay off their balance every month rose, and those that carry a balance fell.

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After subsiding in the first quarter of this year, Americans’ use of credit cards not only regained lost ground in Q2, but surged ahead to a record for seasonally adjusted credit card purchase volumes, according to the American Bankers Association.

But it’s not necessarily ominous news. The share of cardholders who pay off their balance every month rose, those that carry a balance fell and the share of Americans’ disposable income going to card debt has remained flat for six years now.

Every three months since the start of 2008, the American Bankers Association has taken the collective pulse of U.S. credit card holders to publish its Credit Card Market Monitor report. Its latest quarterly installment presents card data from April through June 2019.

Purchase volumes are defined as the dollars spent on new card expenditures, and in 2019’s second quarter, Americans charged more than $1.3 trillion dollars to their card accounts, continuing a relatively steady climb since the Great Recession. Compared to the prior year, 2019’s second quarter purchase volumes were up about 4 percent.

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During the financial crisis, purchase volumes sat between $700-750 billion dollars per quarter. Ten years later, purchases are approaching twice the volume of the recession’s low point: $712 billion in 2008’s Q4.

The ABA’s Q2 data also revealed that those who pay their monthly balance in full each month, called transactors, rose a percentage point to 31.1 percent of the cardholder universe — the highest level since ABA began tracking in 2008.

Conversely, those who carry a monthly balance, called revolvers, fell 1.3 percentage points to 43.2 percent of U.S. cardholders, the lowest level in two years.

When looking at credit card debt as a share of Americans’ disposable income, Q2’s seasonally adjusted reading of 5.3 percent is not only equal to 2018 levels but is essentially unchanged over the past six years.

The ABA’s Credit Card Market Monitor is based on card data drawn from a nationally representative sample provided by Argus Information Services LLC. The Q2 report was released Nov. 4.

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Credit Card Rate Report Updated: September 23rd, 2020
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