The average yield for U.S. Visa and MasterCard-branded credit cards, issued by the top four issuers, will likely decline by eight basis points (bps) for the first quarter, and down 30 bps from mid-year 2014. Forecaster RAM Research projects an average yield for the Big 4 of 11.30% in the first quarter, compared to 11.59% one-year ago.
With the exception of Chase, the average yield for U.S. credit cards issued by the top four issuers, remained relatively flat throughout 2014.
The average yield for Chase U.S. credit cards declined 100 basis points (bps) year-on-year (YOY) and down 70 bps quarter-to-quarter (QOQ). The other three issuers: Bank of America (BofA), Capital One (COF), and Citibank (CITI) fluctuated within a 10 bps band both YOY and Q-Q.
Chase posted an average yield of 11.47% for U.S. credit cards in Q4/14, compared to 12.17% in Q3/14, and 12.47% for Q4/13. The Chase figure represents total net revenue as a percentage of average loans and includes non-interest revenue and net interest income.
The BofA average yield for U.S. consumer credit cards decreased 8 bps QOQ, and down 10 bps Y/Y. BofA posted an average yield of 9.26% for Q4/14, compared to 9.34% in Q3/14, and 9.36% for Q4/13.
The COF average yield for domestic credit cards decreased 3 bps sequentially, and down 1 bps from one-year ago. COF posted an average yield of 14.43% for Q4/14, compared to 14.46% in Q3/14, and 14.44% for Q4/13. The COF figure represents the average yield on loans held for investment and is calculated by dividing annualized interest income for the period by average loans held for investment during the period for the specified loan category. Annualized interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment.
The CITI yield for Citi-branded bank credit cards issued in North America decreased 3 bps sequentially, but increased 2 bps from one-year ago. CITI posted an average yield of 10.35% for Q4/14, compared to 10.38% in Q3/14, and 10.33% for Q4/13. The Citi average yield is calculated as gross interest revenue earned divided by average loans.
CREDIT CARD YIELD HISTORICAL
BIG 4 AVERAGE U.S. YIELD
Source: RAM Research
For data, background and forecasts on Credit Card Yields: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 payments metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
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