Consumer Payment Card News

U.S. Credit Card Debt Growing 6.7% Annually — Total Debt to Top $4T in December

U.S. consumer credit card debt (revolving) for October, mostly credit card debt (95%), remained above the $1 trillion level for the eighth consecutive quarter. The year-on-year (YOY) change edged slightly upward in October. Consumer revolving credit increased at a 6.7% annual rate of growth in October, compared to a revised 4.9% annual rate in September and revised 7.7% annual rate in August, according to CardDataU.S. Credit Card Debt

Consumers of late have been taking on more debt, but the growth rate is down about one-third of the annual growth rate of the prior year. U.S. revolving consumer credit is now growing at a 6.6% year-on-year (YOY) or annual rate, compared to a 4.8% annual growth rate of the prior year.

According to the Federal Reserve, revolving consumer credit outstandings (mostly credit card) stood at a revised $1024.0 billion for end-of-year (EOY) 2017, compared to $969.4 billion for EOY 2016, and $907.9 billion for EOY 2015. At the end of the third quarter of 2018, revolving consumer credit stood at $1028.2 billion.

Non-revolving credit increased at an annual rate of +10.7% in October, according to CardData

Credit Card Debt Solidly Above $1 Trillion

Total revolving credit for October posted at $1037.4 billion, compared to a revised $1028.2 billion in September and a revised $1028.5 billion in August, according to the Federal Reserve.

On a quarterly basis U.S. revolving consumer credit is growing by +6.6% YOY to a revised $1028.2 billion for 3Q/18, compared to a revised $1022.7 billion for 2Q/18, and $1003.5 billion for 3Q/17.

Total Consumer Credit to Set New Record in December

Total consumer credit, at the end of October, stood at $3963.7 billion.

Total U.S. consumer credit is projected to top $4 trillion by end of 2018, according to RAM Research.

U.S. Consumer Revolving Credit

4Q/15: $938.8 billion
1Q/16: $953.2 billion
2Q/16: $968.1 billion
3Q/16: $980.7 billion
4Q/16: $969.6 billion
1Q/17: $979.9 billion
2Q/17: $991.5 billion
3Q/17: $1003.5 billion
4Q/17: $1024.0 billion
1Q/18: $1023.5 billion
2Q/18: $1022.7 billion
3Q/18: $1028.2 billion

Source: Federal Reserve; RAM Research; CardData

New and Revised Data as of 12/07/18

Top 4 Issuers

Credit card loans (outstandings) end-of-period (EOP) in the U.S., among the Top 4 U.S. issuers, gained 3.8% in the third quarter (3Q/18) year-on-year (YOY), posting $430.1 billion. The YOY growth rate is down 50 basis points (bps), compared to the prior quarter, according to CardData.

FOR & DSR Ratios

Consumer Debt Service Ratio (DSR) & Debt Financial Obligations Ratio has been declining slightly. According to the Federal Reserve, on a seasonally adjusted basis, the FOR slightly decreased to 15.31% in 2Q/18, compared to 15.33% in 1Q/18 and 15.53% in 2Q/17. The DSR slipped down to 9.84% in the second quarter of this year, compared to 9.86% in 1Q/18, and 9.97% in 2Q/17, according to CardData.

The FOR peaked at 18.13% in the fourth quarter of 2007. Since peaking at 13.18% in the fourth quarter of 2007, the beginning of the Great Recession, the DSR has declined steadily since, dipping into single digits for the first time in the fourth quarter of 2012 (9.87%).

The household DSR is an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt. The Financial Obligations Ratio is a broader measure than the Debt Service Ratio. It includes rent payments on tenant-occupied property, auto lease payments, homeowners’ insurance, and property tax payment

Australian Credit Card Australian credit card spending and debt growth continues to remain sluggish based on the latest numbers. Credit card outstandings were flat (-0.2%) year-on-year (YOY) in September, while credit card purchase dollar volume (PDV) dropped by 3.1% YOY.