ABA Report: Credit Card Market Recovery Continued in Q4 2021

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A sign of the continued strength of U.S. consumers, monthly credit card purchase volumes rose across all risk levels in the fourth quarter of last year, the third straight increase, according to the latest quarterly report from the American Bankers Association. Credit card market monitor published today.

Monthly purchase volumes increased 4-6% across all risk levels compared to the prior quarter. Purchase volumes were 23-27% higher than the previous year’s levels, and although high inflation was partly responsible for the increase in spending, inflation-adjusted monthly purchase volumes also increased across all risk levels on a quarterly and annual basis. Effective yield on finance charges, which measures interest payments relative to total credit outstanding in the market, fell another nine basis points to 12.01%, a four-year low.

“The strong labor market has allowed consumers to continue driving the economy forward,” said ABA Chief Economist Sayee Srinivasan. “As the U.S. economy faces higher inflation and, therefore, higher interest rates, as evidenced by credit card debt as a share of disposable income, U.S. household balance sheets stay strong to help absorb the shock of those headwinds.”

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