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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – The 2019 Credit Card Data Book: Key Indicators of a Slowing Market
- The average household has 3.6 credit cards
- 130 million households account for nearly 500 millions credit cards
- General purpose credit cards account for over $1 trillion outstanding debt at 6,000 banks and credit unions
- Total open credit lines amount to $3.6 trillion
- In 2016, US consumers spent close to $3 trillion on their cards, and paid 66% in their billing cycles
- Ideally, banks lose no more than 3% to 3.5% on their receivables in bad debt a year
About this report
The 2019 Credit Card Data Book: Key Indicators of a Slowing Market, the latest edition of Mercator Advisory Group’s annual compilation of 12 essential credit card metrics has been released. The report, which provides a view of credit card portfolio volumes, household debt, and open accounts, projects credit risk and revenue results into the next decade.
Readers will get a deeper understanding of credit risk in this year’s report along with a detailed explanation of how the credit card delinquency process works. Early and late delinquencies have a direct impact on credit card profitability, which is expressed through the return on assets (ROA) metric. In the United States, credit card ROA has been steadily falling from the 4.94% achieved in 2014. In this report, Mercator projects 2.4% ROA for 2020.
“As 2019 begins, card issuers need to be planning for 2020 and should expect slower growth, slimmer profits, and tighter lending,” commented Brian Riley, Director, Credit Advisory Service, at Mercator Advisory Group, the author of the research report. “Pay attention to how top issuers are keeping their portfolios in check, as issuers outside of the top 100 are seeing severe risk. In 2018, top issuers experienced credit losses of 3.81% of their receivables while those outside of the top 100 saw their rates surge to 7.92%. If this persists, some market consolidation is likely,” Riley continued.