Credit card limits have expanded significantly in recent years as issuers increased the amount of credit available to U.S. consumers. Total credit limits rose from $3.80 trillion in the third quarter of 2019 to $4.71 trillion in the third quarter of 2023, an increase of nearly $1 trillion in just four years.
The growth comes at a time when credit card issuers are facing a more challenging risk environment. Rising balances, higher delinquencies and charge-offs, and declining returns on assets are prompting issuers to tighten underwriting standards and reassess portfolio risk. Understanding the relationship between growing credit availability and deteriorating credit conditions will be increasingly important as issuers navigate an uncertain economic outlook.
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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Credit Card Data Book Part 2: Internal Dynamics
Credit Limit in Past 5 Years (in Trillions of Dollars)
- $3.80 – Q3 2019
- $3.85 – Q3 2020
- $3.96 – Q3 2021
- $4.30 – Q3 2022
- $4.71 – Q3 2023
Source: New York Fed Consumer Credit Panel/Equifax (2024)
About Report
Part 2 of the annual Javelin Strategy & Research examination of the U.S. credit cards looks at how internal dynamics, such as issuer portfolios and ongoing risk assessment, affect the market. The upshot: As economic stressors rise and loan loss provisions are reserved, the return on assets is declining across the large card issuers, and underwriting standards are tightening as issuers steer their portfolios away from trouble.
Although indications are that a recession, if it occurs, is likely to be mild rather than severe, there are concerning indicators. Credit card balances are going up steadily, and the rate doesn’t appear to be slowing. Banks are also encountering higher delinquencies and charge-offs, with small to midsize institutions taking the biggest hits. These factors demand caution by issuers until the path forward clears.
