CFPB: Credit Card Spending Hit $3.6T in 2024

The Consumer Financial Protection Bureau has released an in-depth review on the consumer credit card market. This seventh biennial review examines the credit card market at the end of 2024. Here is a roundup of the key findings of the study.

Some good news for the credit card industry is that the purchase volume on consumer credit cards grew to $3.6 trillion in 2024, up from $3.2 trillion in 2022. As for annual growth in credit card spending, that figure was about 5% in 2024.

Who is doing the spending? Almost all the growth is due to cardholders with prime plus credit scores or higher. In contrast, the growth rate for cardholders with prime or lower scores has been 0% since 2023.

Balances on credit cards surpassed $1.2 trillion in 2024, and the annual growth in credit card balances was about 6% at the end of 2024. The average monthly card balance per cardholder grew to about $5,300.

But people with prime credit scores carried even higher credit card balances. The average credit card balance for cardholders with prime credit was $8,700.

The average APR on credit cards climbed to 25.2% for general purpose credit cards and up to 31.3% for private label credit cards. These are the highest levels since at least 2015. Most of the APR increases from 2022 to 2024 were due to changes in the prime rate. 

APRs are higher on new credit card accounts as well. The average APR on new general purpose card accounts opened in 2024 was 27.5%, up from 19.8% 10 years ago. 

Credit card interest charges climbed in 2024 with consumers being assessed $160 billion in interest charges on their credit card accounts, up from $105 billion in 2022.

What is driving this big lift in credit card interest charges? The CFPB points to three factors, an increase in APRs, a 9.5% increase in the number of cardholders, and an 18% increase in the average monthly credit card balance per cardholder.

In addition, the share of credit card accounts that revolve balances is back to pre-pandemic levels of about 50%, up from 45% in late 2021.

In 2024, consumers paid more than just interest charges to credit card issuers. They also paid $31.3 billion in credit card fees, an increase of 23% from 2022.

Cash back credit cards lead all general purpose credit card accounts. These cards are typically offered to cardholders with prime or higher credit scores. They have no annual fee or a low annual fee and come with 0% promotional APRs. Over the past 10 years, cash back cards have increased from 28% to 36% of general purpose credit card accounts. 

Consumers are turning to credit cards with 0% introductory offers. In 2024, these offers yielded $899 billion in purchase volume and $352 billion in balances.

In 2024, about one-third of the purchase volume and outstanding balances were for credit cards with a promotional introductory or teaser rate. Credit cards with temporary promotional rates tend to have higher long-term balances than cards without teaser rates.

In early 2024, delinquencies and charge-offs on credit cards increased to historic highs but have eased back down to pre-pandemic levels. By the end of 2024, credit card delinquency rates for general purpose cards was 3.0%, and delinquency rates for private label cards was 3.8%.

There is much to take away from the CFPB review of the credit card market. In 2024, purchase volume increased to $3.6 trillion, and annual growth in credit card spending was about 5%. 

Credit card balances reached higher than $1.2 trillion. The average credit card balance per cardholder was $5,300, and people with prime credit scores carried balances of $8,700.

APRs increased as did interest charges on credit cards. Cash back credit cards are the most popular general purpose credit card, and cards with 0% promotions bring both big purchase volume and balances. After an increase in early 2024, delinquencies are back to pre-pandemic levels.