2021 Consumer Credit Card Market Report

BUREAU OF CONSUMER FINANCIAL PROTECTION | SEPTEMBER 2021

The Consumer Credit Card

Market

Message from

the Acting Director

Credit cards are one of the most commonly-held and widelyused financial products in America ¡ª over 175 million

Americans hold at least one credit card. During the COVID-19

pandemic, credit cards played a vital role as both a source of

credit in emergencies and a payment method as more

transactions occurred online.

As the fifth biennial report to Congress on the credit card

market, this report details how swift actions by both the public and private sectors likely

impacted how many consumers used their credit cards and managed their debts during the

pandemic. To address hardships caused by COVID-19, the Federal government provided

consumers direct relief by issuing a series of economic impact payments, providing enhanced

unemployment benefits, suspending student loan payments and interest accrual for federally

held loans, offering mortgage forbearance, and enacting a moratorium on evictions. At the same

time, credit card issuers provided voluntary relief to consumers by offering payment deferral

and fee waivers.

Supported by these efforts, this report finds that the decline in credit card debt during the

pandemic was unprecedented in speed and magnitude. Measures of consumer stress, such as

late payment incidence and the share of accounts delinquent, hit record lows.

This report also highlights areas in the credit card market that may entail risks for consumers

such as system deficiencies related to implementing relief programs and automatic payment

processes. The Bureau continues to monitor indicators of credit card use, cost, and availability

to identify potential for consumer harm, as well as study the impact of new, innovative products.

Our credit card market report is intended to present the latest research on this vital market to

consumers, issuers, and policymakers. As many consumers, particularly those with non-prime

credit scores, still face numerous hardships due to COVID-19, this report remains critical. The

Bureau will carry out its mission in ensuring this market continues to benefit all participants

during these times of heightened uncertainty.

1

BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT

Sincerely,

David Uejio

2

BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT

Table of contents

Message from the Acting Director .................................................................................1

Table of contents ..............................................................................................................3

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

1.

2.

Introduction ..............................................................................................................13

1.1

Review mandate ........................................................................................13

1.2

Report scope............................................................................................. 14

1.3

Methodology..............................................................................................15

Use of credit .............................................................................................................25

2.1

Product prevalence .................................................................................. 25

2.2 Debt levels ................................................................................................ 27

2.3 Purchase volume .......................................................................................31

2.4 Repayment ............................................................................................... 33

2.5

Delinquency.............................................................................................. 41

2.6 Charge-off.................................................................................................44

3.

Cost of credit ............................................................................................................46

3.1

Total cost of credit....................................................................................46

3.2 Interest charged .......................................................................................48

3.3 Fees assessed............................................................................................ 52

4.

Availability of credit ................................................................................................61

4.1

New accounts ........................................................................................... 61

4.2 Existing accounts ..................................................................................... 77

3

BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT

5.

Practices of credit card issuers ............................................................................86

5.1

Rewards ....................................................................................................87

5.2 Deferred interest ...................................................................................... 91

5.3 Balance transfers.................................................................................... 100

5.4 Cash advances ........................................................................................ 104

5.5

COVID-19 response................................................................................ 108

5.6 Card agreements ..................................................................................... 121

6.

Credit card debt collection ...................................................................................127

6.1

Debt collection markets ..........................................................................127

6.2 Collections prior to charge-off................................................................ 131

6.3 Recovery following charge-off ............................................................... 144

6.4 Litigation .................................................................................................153

6.5 Credit card debt collection during COVID-19........................................155

7.

Innovation ...............................................................................................................158

7.1

Product innovation ................................................................................ 158

7.2 Consumer adoption of innovative technologies ................................... 169

Appendix A:

4

Supporting figures ............................................................................177

BUREAU OF CONSUMER FINANCIAL PROTECTION ¡ª CONSUMER CREDIT CARD MARKET REPORT

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