The number of new credit cards opened in last year’s fourth quarter topped 80 million and purchase volumes rose across all risk categories, according to the American Bankers Association’s credit card market monitor.
According to the ABA’s report, the 80.3 million new credit card accounts opened in the final quarter of 2015 represented a year-over-year increase of 16.3 percent. New accounts increased by double-digits across all three risk categories. While new subprime accounts saw a 26 percent year-over-year increase, the ABA noted that subprime accounts still remained well below pre-recession levels. The association said those increases bring the number of total open credit cards to 323 million nationwide, about 5.3 percent higher than the year-ago timeframe and a new post-recession high.
Meanwhile, monthly purchase volumes rose 5.9 percent for subprime accounts, 3 percent for prime accounts and 3.1 percent for super-prime accounts in the fourth quarter compared to the same period a year ago.
The association cheered the numbers as a bellwether for healthy consumer spending and continuing labor strength.
“Recent growth in the credit card market largely mirrors what we’re seeing in the economy’s consumer sector,” Jess Sharp, executive director of ABA’s Card Policy Council, said in a statement. “Labor markets continue to perform well, wages are slowly climbing and gasoline prices remain low – all of which translates into a healthier outlook for both consumers and the credit card market.”
The ABA’s report also said that even though consumers are using credit cards, they’re spending within their means. The share of dormant credit card accounts declined 0.7 percent to 28.1 percent of all accounts, offset by gains in revolver accounts (an increase of 0.4 percent to 42.1 percent of all accounts) and transactor accounts (0.3 percent to 29.7 percent). The ABA defines revolvers as those account holders who carry a monthly balance and transactors as those who pay their balance in full each month.
As a share of disposable income, the ABA said, credit card credit outstanding increased to 5.38 percent but remained at historically low levels.
