Credit Card Data Book Part 2: Internal Dynamics

Part 2 of the annual Javelin Strategy & Research examination of the U.S. credit cards looks at how internal dynamics, such as issuer portfolios and ongoing risk assessment, affect the market. The upshot: As economic stressors rise and loan loss provisions are reserved, the return on assets is declining across the large card issuers, and underwriting standards are tightening as issuers steer their portfolios away from trouble. 

Although indications are that a recession, if it occurs, is likely to be mild rather than severe, there are concerning indicators. Credit card balances are going up steadily, and the rate doesn’t appear to be slowing. Banks are also encountering higher delinquencies and charge-offs, with small to midsize institutions taking the biggest hits. These factors demand caution by issuers until the path forward clears.

Key questions discussed in this report: 

• How have credit card portfolios performed over the past year? 
• What will the conditions be for the credit card market in 2024? 
• How will current conditions signal what’s ahead for the credit card market?

Companies Mentioned: 

Consumer Financial Protection Bureau, Equifax, Federal Deposit Insurance Corporation, Federal Reserve, New York Fed, Philadelphia Fed, St. Louis Fed, TransUnion