The Consumer Credit Card Market
BUREAU OF CONSUMER FINANCIAL PROTECTION | AUGUST 2019
The Consumer Credit Card
Market
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BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT
Message from
Kathleen L.
Kraninger
Director of the Bureau of Consumer
Financial Protection
Credit cards are one of the most commonly-held and widely-used financial products in America.
At last count, nearly 170 million Americans hold credit cards, many of them carrying more than
one. Some consumers use these strictly as payment devices, paying their balances in full each
month, while others use them as a source of credit and carry a balance from month to month.
The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) requires the
Bureau to prepare a biennial report to Congress regarding the consumer credit card market.
This is the Bureau¡¯s fourth report, and details findings regarding, among other things, the cost
and availability of credit and innovations in the credit card marketplace. The report also
emphasizes that with the passage of time, it is becoming increasingly difficult to correlate the
CARD Act with specific effects in the marketplace that have occurred since the issuance of the
Bureau¡¯s last biennial report, and, even more so, to demonstrate a causal relationship between
the CARD Act and those effects. Accordingly, while the Bureau will continue to report on the
CARD Act¡¯s effects where appropriate and feasible, the Bureau anticipates future reports will
focus more on overall conditions in the credit card market.
Evidence-based research like this is one way in which the Bureau discharges its statutory duty to
monitor for risks to consumers in the offering or provision of consumer financial products and
services. It is my hope that the publication of this report with the latest data on this important
market will be useful to consumers, providers of credit card products, and policymakers.
Sincerely,
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BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT
Kathleen L. Kraninger
3
BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT
Table of contents
Message from Kathleen L. Kraninger ........................................................................ 2
Table of contents......................................................................................................... 4
Executive summary..................................................................................................... 6
1. Introduction ......................................................................................................... 15
1.1
Review mandate .......................................................................................15
1.2
Report scope ........................................................................................... 16
1.3
Methodology ............................................................................................ 17
2. Use of credit ........................................................................................................ 26
2.1
Market-level metrics ............................................................................... 26
2.2 Consumer use metrics ............................................................................ 30
2.3 Delinquency and charge-off.................................................................... 39
2.4 Usage of digital servicing ........................................................................ 47
3. Cost of credit....................................................................................................... 55
3.1
Total cost of credit .................................................................................. 55
3.2 Interest charged ...................................................................................... 57
3.3 Fees assessed........................................................................................... 61
4. Availability of credit............................................................................................ 72
4.1
New accounts .......................................................................................... 72
4.2 Existing accounts .................................................................................... 90
5. Practices of credit card issuers......................................................................... 99
5.1
4
Rewards ................................................................................................... 99
BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT
5.2 Balance transfers................................................................................... 106
5.3 Cash advances ....................................................................................... 109
6. Scholarship on CARD Act effects ................................................................... 113
6.1
Direct effects .......................................................................................... 116
6.2 Overall effects.........................................................................................127
7. Credit card debt collection .............................................................................. 137
7.1
Debt collection markets .........................................................................137
7.2 Collections prior to charge-off .............................................................. 140
7.3 Recovery following charge-off .............................................................. 152
7.4 Special topics in credit card collections................................................ 166
8. Innovation ......................................................................................................... 170
8.1
Account servicing innovation ................................................................ 171
8.2 Innovation at the physical point-of-sale................................................179
8.3 Risk management innovation ............................................................... 182
Appendix A:
5
Supporting figures ........................................................................ 191
BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT
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