CFPB Report: Consumer Credit Market Remains Largely Stable
1/2/2018 4:00:00 PM
The report finds that more consumers are signing up for secured cards that require a cash depost.
The Consumer Financial Protection Bureau’s biennial report on the credit card market found that credit lines, number of accounts, average card debt, and enrollment in online services have increased over the past several years, according to a news release from the CFPB. The report also found that cardholders average fewer credit cards than before the recession, and more customers are signing up for secured cards that require a cash deposit.
Congress requires the bureau to monitor the credit card marketplace and to produce a report on a biennial basis. This report, the bureau’s third, found that the cost of card credit in general and across credit score tiers has remained largely stable since the bureau’s last report in 2015.
The composition of overall consumer costs—interest rates and fees—has also proved largely stable since the bureau’s last report. The report also found that delinquency and charge-off rates, which were high during the financial crisis and then fell to historical lows in the years following the recession, have modestly increased over the last two years.
Other key findings in the report, according to the CFPB news release, include:
- New credit card originations remain below pre-crisis volumes but have increased by roughly 50 percent since 2010. In 2016, consumers opened around 110 million new credit card accounts, which is roughly 50 percent higher than 2010 and a higher total than in any single year since 2007. However, new account volume has not yet returned to the level it had reached in the years before the recession.
- Average credit card debt increased 9 percent over the last two years. The average debt of cardholding consumers overall has increased 9 percent over the last two years. Average balances for cardholders with low credit scores have increased at faster rates. Cardholders with deep subprime scores, for example, have seen a 26 percent increase in their average credit card debt over the last two years.
- Cardholders average fewer credit cards than before the recession: Around 169 million consumers had at least one credit card as of mid-2017. Although the average number of cards held by cardholders has increased in recent years for all credit tiers except superprime, cardholding remains below pre-recession levels. For example, cardholders with prime scores or better hold an average of more than four cards now, while they held more than five before the recession.
Read the full report on the CFPB's website.
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