Bank credit card purchase dollar volume (PDV) increased 8.9% year-on-year (Y/Y) and 13.2% quarter-on quarter (Q/Q) in the second quarter (Q2/14), surprising many analysts as outstandings fell flat. The change in consumer behavior is significant for issuers who rely on interest income to subsidize purchase-based reward program expenses, according to CardData.
Among the nation’s top four Visa (VS) and MasterCard (MC) bank credit card players, Chase posted the strongest Y/Y Q2/14 gain of 12%, followed by Capital One (COF) at 11%. Citibank (Citi) and Bank of America (BofA) posted single digit Y/Y gains of 5% and 3%, respectively.
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; 7/18/14)
The consumer PDV shift, with all the top issuers posting solid quarterly gains, is expected to become more evident when Visa releases its second calendar quarter report on July 24th at 5pm. MasterCard’s second quarter results will be released at 9am on July 31st.
For the second quarter, Chase reported a 12% Y/Y gain in bank credit card PDV to $118.0 billion, compared to $104.5 billion in the prior quarter, and $105.2 billion one-year ago.
For Q2/14, BofA reported a 3% Y/Y increase in U.S. consumer bank credit card PDV to $53.6 billion, compared to $48.9 billion in the prior quarter, and $51.9 billion one-year ago. BofA also reported a 2.7% Y/Y and a 5.5% Q/Q gain in debit card purchase volume of $69.5 billion.
For the second quarter, COF reported an 11% Y/Y gain in U.S.bank credit card PDV to $52.7 billion, compared to $44.1 billion in the prior quarter, and $47.3 billion one-year ago.
For Q2/14, Citi reported a 5% Y/Y increase in North America bank credit card PDV to $43.9 billion, compared to $39.5 billion in the prior quarter, and $41.9 billion one-year ago.
RAM Research projects aggregate bank credit card PDV among the nation’s top four issuers will continue to increase in 2014 and should top $270 billion in the third quarter.
Q2 DOMESTIC CC PDV (all $ billions)
Q2/13 Q3/13 Q4/13 Q1/14 Q2/14
Chase $105.2 $107.0 $112.6 $104.5 $118.0
BofA $51.9 $52.8 $54.5 $48.9 $53.6
COF: $47.3 $47.4 $50.4 $44.1 $52.7
Citi: $41.9 $41.7 $43.4 $39.5 $43.9
TOTAL: $246.3 $248.9 $260.9 $237.0 $268.2
Source: CardData
RESOURCES: For more data on Big 4 Bank Credit Card PDV access CardData®. For information and commentary on Big 4 Bank Credit Card PDV visit the searchable CardFlash® Library of more than 58,000 articles published since 1995. Custom RAM Research® projects on Big 4 Bank Credit Card PDV are available exclusively through CardWeb.com.®
