Tuesday, September 30, 2014

ABA Report: Credit Card Use Mirrors Broader Economy in First Quarter

The economic contraction that occurred in this year’s first quarter also affected the credit card market, putting downward pressure on average credit lines and monthly purchase volumes, according to the latest edition of the American Bankers Association’s Credit Card Market Monitor.

“The sharp economic contraction we saw during this year’s brutal winter also reverberated across the credit card market, with weaker consumer spending leading to a decline in credit card purchases,” said Kenneth J Clayton, ABA’s executive vice president of legislative affairs and chief counsel. “The economy rebounded strongly in the second quarter, and time will tell whether the card market will recover as quickly and robustly.”

The study, reflecting data from the first quarter of 2014, found that monthly purchase volumes declined for all consumer categories. Compared to the fourth quarter of 2013, monthly purchase volumes fell 8.4 percent for sub-prime accounts, 8.1 percent for prime accounts and 5.2 percent for super-prime accounts. This coincided with weak consumer activity, particularly in January and February. Retail sales contracted 1.0 percent on an annualized basis in the first quarter.

Read the full press release.

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