There’s no doubt about it: consumers love credit cards. They’re easy to use, convenient, and generally safer than cash. They’re also surprisingly fascinating. To give you some insights into why, we’ve compiled this list of 12 facts and statistics you should know about the cards you love.
1. Chase Has the World’s Largest Credit Card Portfolio
Five of the eight biggest card companies in the world are headquartered in the United States, according to global card and mobile payment industry analyst Nilson. Chase held the largest US credit portfolio in 2021, worth $144 billion.
Next followed Citi with $102 billion, American Express with $95 billion, Bank of America with $89 billion, and Capital One with $88 billion.
The three remaining largest global issuers, ranked second, fourth, and sixth on this list, are headquartered in China.
2. Chase Led US Purchase Volume in 2021
Chase also ranked highest in the US for purchase volume for general-purpose cards in 2021 at $950 billion, Nilson reported. Next on this list were:
American Express: $868 billion
Citi: $483 billion
Capital One: $455 billion
Bank of America: $414 billion
Discover: $182 billion
US Bank: $166 billion
The total purchase volume for the top seven was more than $3.5 trillion and comprised 77% of the total US card sector, up 25.6% compared with 2020.
3. Card Balances and Utilization Ratios Declined in 2021
Consumers have steadily lowered their credit card debt in recent years, according to the credit bureau Experian.
In 2021, the average card balance dropped to $5,525 from $5,897 in 2020. In 2019, the average balance was $6,494. Credit utilization rates, which measure how much available credit consumers are using, dropped to 25% in 2021, compared with 26% in 2020 and 30% in 2019.
Lower card debt levels and lower utilization rates suggest US households may be better positioned financially to respond to emergencies, like the COVID-19 pandemic.
The pandemic may have influenced these trends as consumers allocated their government stimulus checks to pay off debt.
4. New Accounts Are on the Rise
Despite the drop in total credit card debt, consumers still opened many new card accounts. In fact, they opened 21 million new card accounts in 2019 alone, Experian reported. More than 12 million new accounts were added in 2020.
Meanwhile, the total number of cards in circulation jumped to 497 million in 2020, up from 485 million in 2019.
Lower balances have historically translated to fewer new accounts. These data reversed that pattern. Consumers may have opened new accounts, even though they didn’t intend to carry more card debt overall, to take advantage of signup bonuses, 0% annual percentage rate (APR) offers, or rewards programs.
5. The Average Consumer Has 3 Credit Cards
One statistic that may not be surprising is that consumers opened fewer retail cards in the past few years, even while the average number of credit cards remained steady.
Overall, retail cards per person dropped to 2.3, on average, in 2021 compared with 2.42 in 2020 and 2.5 in 2021. The average number of credit cards per person remained unchanged at 3.0 during the same time frame, Experian found.
On average, New Jersey had the most cards of any state, with 3.37 credit cards and 2.54 retail cards per consumer.
6. The Pandemic Didn’t Spike Delinquency Rates
Though the pandemic stressed the US economy and individual consumers, that pain didn’t show up as a spike in card delinquency rates. The proportion of card accounts with payments that were 30 or more days past due dropped in 2021 to 1.67% compared with 1.82% in 2020, Experian found.
Consumers also did well in building credit and boosting their credit scores in 2020. FICO reported that, on average, its score went up about one point per year until 2020, when the average jumped seven points to 710 from 703. Previously, the largest increase was 3.8 points from 2015 to 2016.
FICO suggested that contributing factors in 2020 likely included fewer missed payments, lower debt levels, government stimulus checks, and lenders offering loan payment flexibility due to the pandemic.
7. Credit Card Balances See Largest Spike in 22 Years
With the pandemic on the wane and inflation on the rise, substantial proportions of consumers say they plan to cut back on discretionary spending and allocate more of their income toward debt repayment and investment accounts.
That intention showed up in the data. A full 34% of consumers surveyed by credit bureau TransUnion said they planned to allocate more to paying bills and loans, such as utilities and card debt. Discretionary spending included large purchases, such as appliances and cars, and smaller expenses, such as dining out, travel, entertainment, and retail shopping.
Those well-meant plans may prove short-lived. The New York Federal Reserve Bank reported that card balances rebounded $860 billion in the fourth quarter of 2021, the biggest quarterly increase in the 22 years that the New York Fed has collected this data.
8. Cards Charged Interest Pay Higher Rates
Credit card interest fees vary from card to card and month to month. In 2021, the average rate for all cards was 14.6%. The average rate for cards that were charged interest (consumers who carried a balance) was 16.45%, according to the Federal Reserve’s monthly Consumer Credit Report.
Credit card rates tend to be higher than interest rates for other types of debt, such as personal loans and auto financing. But those 2021 rates weren’t the highest ever for credit card debt.
The average interest rate for all credit cards was 15.05% in 2019. For card accounts that were charged interest, the average rate was 16.98%.
The Fed doesn’t directly set the rates consumers pay for cards or other loans, but the Fed does adjust certain bank rates, which can indirectly affect consumer rates. With the Federal Open Market Committee set to boost its benchmark federal funds rate this year, consumer rates may continue to increase.
9. Holiday Spending Lights Up Fraud Attempts
Consumers aren’t usually financially responsible for fraudulent transactions on their cards. Still, it’s important to report suspicious charges to your card company when they occur.
While you should check for fraudulent charges year-round, it’s especially important to watch out for them at the end of the year. That’s because the traditional holiday shopping season has become a popular time for fraudsters.
The TransUnion credit bureau found that almost 20% of global eCommerce transactions between Thanksgiving and Cyber Monday were potentially fraudulent.
10. BNPL Attracts 100 Million Adults
As with credit cards, BNPL loans offer consumers financing at the point of purchase. Rather than add the purchase amount to a card balance, the BNPL option divides the amount into payments known as installments.
For example, a BNPL service can split a $100 purchase into four $25 payments. The first installment is usually due at the time of purchase. The others are due over a set number of weeks, months, or years.
As many as 100 million US adults may have used at least one buy now, pay later (BNPL) loan from February 2021 to February 2022, according to TransUnion. That estimate is based on a poll of 2,949 adults, which found that 38% of respondents said they’d used BNPL in the previous 12 months.
With so many consumers using BNPL services, some credit card companies have introduced this option.
11. Grace Periods Aren’t Required
It’s pretty common to read the advice, “Pay your credit card balance in full every month to avoid interest charges!” Well, that’s not always true.
Most credit cards provide interest-free grace periods that give you a certain time frame to pay your charges without accruing interest fees. But a few cards out there do not provide grace periods, and that’s because they aren’t legally required to.
The law states that if a card offers a grace period, it must last a minimum of 21 days, but it does not state that all issuers must offer a grace period. This is one of the many reasons it’s imperative to read the card’s terms and conditions before signing up.
12. A Single Late Payment Can Lower Your Credit Score 100 Points
Your credit card company will charge you a late fee the day after your credit card payment is due and you can expect the calls, letters, and emails to commence. But your card issuer won’t report your late payment to the credit bureaus until it’s 30 or more days past due.
That’s because a single late payment can seriously harm your credit score. The better your credit score, the worse the damage. Someone who has excellent credit can lose as many as 100 points from their credit scores, whereas someone who already has bad credit won’t see as large of an impact.
Your payment history is the most important factor used to determine your credit score because your credit score was created to predict the likelihood that you’ll repay your debts as agreed. Late and missed payments show creditors that they may not get their money back and make it harder for you to get approved for financing of any kind.
Research Facts and Stats When You Shop For New Cards
Credit cards are an important financial product for consumers. They also are part of a huge marketplace that often changes in important ways for consumers, such as interest rate fluctuations or new options like BNPL loans. Fortunately, consumers have lots of great resources to keep up with card trends.
When you’re shopping for new cards, take some time to read up on what’s going on, so you’ll understand your options and the terms, conditions, and benefits of the new cards that you’re interested in.