U.S. banking’s top executive summed it up in nine words, as the WSJ reports on Jamie Dimon’s brief summary.
- “The consumer in the United States is doing fine”
Never without a loss for quotable quotes, Jamie continues:
- “People like their credit cards. They use their credit cards more than they use their debit cards,” Mr. Dimon said. “I don’t remember the last time I used my debit card.”
With second-quarter reporting covered at most major banks, some interest facts emerge, highlighting Mercator’s December prediction that new account growth will taper and card issuers will tend to work with their existing account base.
- Banks’ credit-card customers increased both their spending and borrowing in the quarter.
- At JPMorgan, card spending rose 11% to $192.5 billion, while balances rose 8% to $157.6 billion.
- The bank, the largest U.S. lender by assets, said most of the growth was from existing customers rather than new accounts.
Across the street on Park Avenue in NYC, Citi reports similar news:
- At Citigroup, the purchase volume on its nearly 35 million branded credit-card accounts in the U.S. rose 8%, while balances increased 3%.
Wells, who is working their way out of the penalty box, presents promising news.
- Card purchases and balances rose 6% at Wells Fargo, which has a smaller card business.
In our 2019 Credit Card Data Book, we explained how the U.S. market is saturated with credit cards and that three events will happen, consistent with today’s current market. Account growth will fall because every household has sufficient credit. Card issuers will grow organically and increase balances, and credit costs will increase slowly.
3 for 3 so far this year. Keep your fingers crossed it all holds true for year-end!
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
