May 29, 2012 5:52 am
Balances were $531 billion in April 2012 compared to slightly more than $730 billion in January 2009. Retail card balances have not trended up or down, remaining even with seasonally adjusted pre-recession levels, however, the number of retail card accounts fell sharply. Over the 28 months ending December 2010, card accounts fell by 22 percent. They have since grown by 4.7 percent, now reaching 173 million accounts. In April 2012, available credit for retail credit cards (the difference between total credit limits and balances) increased approximately $5 billion after bottoming out in Q4 2011, driven primarily by rising credit limits.
"The combination of increased available credit and more timely payments among card borrowers has led to the recent growth in card lending," explains Equifax Chief Economist Amy Crews Cutts. "Consumers are starting to respond to increased credit availability both in cards and other tradelines, a signal of both their financial confidence and improving economic conditions. In turn, this increased consumer credit activity bodes well for U.S. economic growth through the second half of 2012."
Other highlights of the data include:
- Aggregated bank card credit limits have held steady for the past six months at $2.4 trillion, roughly 6.6 percent higher than the low point set in February 2011.
- New bank card issuance rose almost 37 percent in February 2012 relative to the same month a year ago.
- The credit limit on new cards averaged $4,784 in February 2012, a 17 percent increase from the February 2011 average of $4,008.
- Utilization (the ratio of balances to credit limits) was slightly more than 22 percent in April 2012, nearly equaling November 2007 lows.
- As of March 2012, roll rates (the rate at which consumers progress from the "current" stage in payments to 30 days past due) have remained below 1 percent since February. This marks the first instance in more than five years roll rates have remained at this level for more than two months.
- Retail card credit limits are stabilizing after falling 15 percent in early 2010 and another 7 percent in mid 2011 (currently at $299 billion).
Published with permission from RISMedia.