The Consumer Credit Card Market 2017

December 2017

The Consumer Credit Card Market

Table of contents

Table of contents.........................................................................................................2

Executive summary.....................................................................................................5

1. Introduction.........................................................................................................16 1.1 Review mandate...................................................................................... 16 1.2 Scope ........................................................................................................17 1.3 Methodology ........................................................................................... 18

2. Market size and foundational metrics of consumer use .................................30 2.1 Total market size..................................................................................... 31 2.2 Market metrics by credit score ............................................................... 39 2.3 Consumer-level metrics of market size .................................................. 45 2.4 Card payment behavior........................................................................... 54 2.5 Rewards................................................................................................... 59 2.6 Delinquency and charge-off.................................................................... 65

3. Cost of credit.......................................................................................................71 3.1 Total cost of credit .................................................................................. 72 3.2 Interest rates ........................................................................................... 77 3.3 Fees . ....................................................................................................... 87 3.4 Cash advances ......................................................................................... 97

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CONSUMER FINANCIAL PROTECTION BUREAU -- CONSUMER CREDIT CARD MARKET REPORT

3.5 Deferred interest promotions ................................................................101

4. Availability of credit..........................................................................................111 4.1 New accounts ......................................................................................... 112 4.2 Credit lines ............................................................................................ 143

5. Credit card issuer practices ............................................................................163 5.1 Digital account servicing....................................................................... 163 5.2 Credit score access .................................................................................174 5.3 Balance transfers....................................................................................177 5.4 How complicated are credit cards? ...................................................... 195

6. Products marketed to "non-prime borrowers" ..............................................205 6.1 Consumers without prime credit scores...............................................205 6.2 Unsecured general purpose cards offered by mass market issuers ..... 207 6.3 Products offered by subprime specialists .............................................208 6.4 Private label credit cards ...................................................................... 210 6.5 Secured credit cards.............................................................................. 213 6.6 Consumer use of these products...........................................................234

7. Third-party comparison sites ..........................................................................265 7.1 Introduction .......................................................................................... 265 7.2 Product and market overview............................................................... 267 7.3 Consumer experience ........................................................................... 277 7.4 Behind the scenes ................................................................................. 292 7.5 Future developments ........................................................................... 300

8. Credit card debt collection ..............................................................................301 8.1 Definitions.............................................................................................302

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CONSUMER FINANCIAL PROTECTION BUREAU -- CONSUMER CREDIT CARD MARKET REPORT

8.2 Debt collection markets ........................................................................303 8.3 Debt collection and recovery practices.................................................308 8.4 Survey findings ..................................................................................... 312

9. Product innovation ...........................................................................................334 9.1 Innovations discussed above ................................................................ 335 9.2 Topics from the 2015 Report ................................................................ 335 9.3 Other developments.............................................................................. 347

Appendix: Balance transfer payoff methodology.................................................351

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CONSUMER FINANCIAL PROTECTION BUREAU -- CONSUMER CREDIT CARD MARKET REPORT

Executive summary

Every year, consumers use hundreds of millions of credit cards to spend trillions of dollars and revolve hundreds of billions of dollars of debt. Credit card issuers, payment card networks, and other market players spend billions of dollars annually to promote their brands and attract new customers. In 2017, Forbes magazine included three of the four largest American payment card networks, as well as a number of the largest credit card-issuing banks, in their list of the 100 most valuable brands in the world.1

In 2015, we wrote that "[t]he credit card marketplace is among the largest, most diverse, and most complex markets of any consumer financial product."2 Over the last two years, that statement has become even more appropriate. The market has grown in size, in the number of its offerings and participants, and in the scope and features of its products. These trends accentuate the importance of monitoring marketplace developments, as the Bureau has been instructed by Congress to do on a biennial basis.

Below, we discuss the background for this report. We then summarize the key findings of the report. We conclude with a note about consumer satisfaction and issuer profitability.

1 See Forbes, The World's Most Valuable Brands, (2017 Ranking), available at .

2 Consumer Fin. Prot. Bureau, The Consumer Credit Card Market, at 7 (Dec. 2015) ("2015 Report"), available at .

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CONSUMER FINANCIAL PROTECTION BUREAU -- CONSUMER CREDIT CARD MARKET REPORT

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