In an era where financial transactions are increasingly digitized, credit cards have become indispensable tools for millions of consumers. However, the convenience of plastic comes at a cost. As the financial landscape continues to evolve, the specter of credit card debt looms large over households across the nation.
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Data for today’s episode is provided by Javelin Strategy & Research’s Report: A Mid-Year View of U.S. Credit Cards
Credit Card Debt in the U.S.
- In Q4 2018, credit card debt was $0.848 trillion.
- In Q4 2019, credit card debt was $0.927 trillion.
- In Q4 2020, credit card debt was $0.819 trillion.
- In Q4 2021, credit card debt was $0.856 trillion.
- In Q4 2022, credit card debt was $0.986 trillion.
Source: Federal Reserve Bank of New York, 2023
About Report
The consumer credit card market is undergoing significant changes, and issuers must be ready to adapt. In this report, Javelin Strategy & Research tracks key market indicators to demonstrate the mounting risk that may hurt issuers at the end of the year and into 2024. We find that consumer credit payment volumes continue to grow and debt increases—a signal that consumers are not paying down their balances. We also see charge-offs rising across banks of all sizes, and these are alarmingly high among small and midsize banks. These banks must carefully manage their risk and cover loan losses to protect their bottom lines.
We also examine the impact of student loan payments resuming in October, which will cause a significant strain on consumer spending and may exacerbate growing issues in household budgets. Issuers may respond to this audience through targeted marketing campaigns and promotional offers. In addition to these areas, we look at the potential impact of future regulations, most notably the Credit Card Competition Act of 2023 and its potential effects on the future of consumer credit cards. We maintain that passage of the act into law will cause significant changes to the U.S. credit card rewards landscape and may not work as intended.
