Bank credit card outstandings were flat year-on-year (Y/Y), historically and disappointingly weak compared to the prior quarter. Among the nation’s top four Visa (VS) and MasterCard (MC) issuers, who control way more than half of the total U.S. bank credit card market, second quarter (Q2/14) end-of-period (EOP) aggregate outstandings of $353.6 billion were actually below the Q2/13 tally of $354.6 billion and up a measly $9 billion from Q1/14.
Among the Big 4 VS and MC issuers for the second quarter, Chase posted the strongest gain of 1.4% Y/Y and Capital One (COF) came in second place with a 1.0% Y/Y gain. Bank of America (BofA) and Citibank (Citi) posted Y/Y declines of 1.7% and 2.9%, respectively.
CardData says the reason is crystal clear: more Americans see bank credit cards as bank payments cards. Revolving credit card debt is reemerging as not a desirable consumer financial strategy in 2014.
The American Bankers Association Credit Card Market Monitor research recently found the share of cardholders who are transactors (those who pay off their balances in full instead of carrying a balance forward) increased from 28.6% to 29.0%, the highest share on record. The share of cardholders carrying a balance (revolvers) ticked down 0.1% to 41.7% of all accounts, while dormant accounts fell from 29.7% to 29.3%. (CF Library 7/7/14).
According to the latest figures released by the Federal Reserve in July, the annual rate of growth of U.S. revolving debt (90% credit card) slowed to a seasonally adjusted annual rate of 2.5% in May, compared to 8.4% in Q1/14 and 7.3% in Q2/13.
For the second quarter, Chase reported a 1.4% Y/Y gain in bank credit card EOP outstandings to $126.1 billion, compared to $121.8 billion in the prior quarter, and $124.3 billion one-year ago.
For Q2/14, BofA reported a 1.7% Y/Y decline in U.S. consumer bank credit card EOP outstandings to $89.0 billion, compared to $87.7 billion in the prior quarter, and $90.5 billion one-year ago.
For the second quarter, COF reported a 1.0% Y/Y gain in U.S.bank credit card EOP outstandings to $71.2 billion, compared to $68.3 billion in the prior quarter, and $70.5 billion one-year ago.
For Q2/14, Citi reported a 2.9% Y/Y decline in North America bank credit card EOP outstandings to $67.3 billion, compared to $66.8 billion in the prior quarter, and $69.3 billion one-year ago.
RAM Research projects aggregate bank credit card EOP outstandings among the nation’s top four issuers will decline further in the third quarter to $351 billion.
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