The Credit Card Data Book: 12 Significant Indicators

  • ID: 4438372
  • Report
  • Region: Global
  • 23 Pages
  • Mercator Advisory Group
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Expect More Conservative Credit Card Issuance in 2018 as the Lenders Face Increased Delinquency and Rising Interest Rates

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The research report The Credit Card Data Book: 12 Significant Indicators finds rising account delinquency and less profitability at credit card issuers in the United States, which is likely to lead issuers to tighten credit after a banner growth year.

More U.S. households are revolving credit card debt today than did before the recession, and contingent liability, the amount of open credit lines, will pass the previous high during 2018. The author cautions credit card issuers to be watchful of increases in account delinquency, which may further disrupt their profitability. Credit cards remain profitable for retail bankers, but reductions in non-interest revenue since the Credit Card Accountability Responsibility and Disclosure Act of 2009 (the CARD Act) have disrupted the business model. Credit loss protection must be a top consideration for card issuers.

"The return on assets (ROA) indicator for credit cards slipped again during 2017 and is trending downward," commented Brian Riley, Director, Credit Advisory Service, author of this report. "Increases in delinquency will drive up costs and negatively impact credit losses, a major industry expense. Growth has been solid, but the basics of credit management are what will bring in profits for issuers during 2018."

Highlights of the research report include:

  • The credit card aging process
  • Revolving debt
  • Open credit card account volume
  • Consumer credit delinquency
  • Bank return on assets
  • Projected interest rates
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1. Executive Summary

2. Introduction

3. Measuring Consumer Credit

  • Revolving Debt in the United States
  • Plenty of Opportunities for Credit Unions to Capture Commercial Bank Credit Cards
  • Account Growth Will Taper After Peaking in 2018

4. Credit Risk

  • The Credit Card Aging Process
  • Early Delinquency Is Trending Upward in the US
  • Later Delinquency Is Increasing
  • More Delinquency Is Flowing Toward Write-off

5. Credit Card Dynamics

  • Return on Assets (ROA)
  • Credit Card Interest on the Rise
  • Credit Card Contingent Liability Is at a New Peak

6. External Data

  • Record Low Unemployment Rate
  • The Prime Interest Rate Is Likely to Rise
  • The Household Budget

7. Conclusions

  • Endnotes

List of Figures
Figure 1: A Dozen Essential Credit Card Industry Metrics
Figure 2: Revolving Debt Passes the Recession Peak
Figure 3: General Purpose Credit Cards Issued by Commercial Banks Dominate Bank Card Usage
Figure 4: Open US Credit Card Accounts Will Peak in 2018
Figure 5: The Credit Card Aging Process
Figure 6: New Delinquency Rates Are Ticking Upward in the US
Figure 7: Serious Delinquency Is Also Increasing
Figure 8: Increased Losses Are Raising the Write-off Rate
Figure 9: Credit Card ROA Is Falling but Outpaces Retail Banking
Figure 10: Credit Card Interest Rates Are Rising
Figure 11: Open Credit Lines on General Purpose Cards Will Set a New Record in 2018
Figure 12: US Unemployment Is Heading Below 4%
Figure 13: Prime Lending Rate Is Likely to Rise in 2018
Figure 14: US Consumer Budgets Appear Under Control

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  • Chase
  • Citi
  • FICO
  • HSBC
  • LexisNexis Risk Solutions
  • Mastercard
  • Visa
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