Credit-card spending, which fell during the first three months of 2014, rebounded in the second quarter, according to a quarterly report by the American Bankers Association released Wednesday (Dec. 17).
Spending by users of subprime credit cards jumped 14.3 percent during Q2, while prime credit-card spending rose 10.3 percent and super-prime account purchases increased 8.2 percent.
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In a sign of an improving economy, the share of credit-card users who pay off their balances each month rose by 0.6 points to 29 percent of all accounts. Outstanding credit-card debt as a share of disposable income was little changed at 5.2 percent, a 15-year low.
The number of new credit-card accounts rose 10 percent year-on-year, driven mostly by growth in subprime and prime accounts. The average credit line for new accounts rose slightly for subprime and prime accounts but increased 1.2 percent for super-prime accounts, reflecting lenders’ higher “confidence in consumers’ ability to manageable their household debt,” said ABA SVP Molly Wilkinson.
According to the report, the share of credit-card users whose accounts carried a balance that rolled over to the next month (and thus had finance charges) at least once in the quarter dropped 1.5 percent from Q1 to 41.2 percent, an all-time low. Accounts that were active but had no finance charges were up 0.6 percent to 29 percent, and the number of dormant credit-card accounts rose 0.8 percent to 29.8 percent.
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