This Javelin Strategy & Research report provides a view of the U.S. credit card payment system. It provides a perspective on the ecosystem’s profitability, consumer demand, issuer stability, credit quality, and external factors. We illustrate how market performance varies among the 12 top issuers driving the market and the remaining 3,000 smaller issuers. We suggest that mandated stress tests from Dodd-Frank, or a down-market surrogate, help ensure stability throughout the network.

Overall, the industry is sound, though downstream economic issues can disrupt the norm, particularly at the lower end of the market, where charge-offs seize bank profits and create marginal returns for smaller players.

Consumer demand is high, as evidenced by growing revolving debt and cardholder growth, which outpace population growth by eight times. A significant regulatory bill, the Credit Card Competition Act, was introduced to the Senate in June 2023 but has a long way to go before it is enacted. If the action does take effect, expect lenders to protect their margins by reducing weaker customer segments.

In short, issuer profits are substantial, demand is high, and general risk is under control. However, if there is a severe economic downshift, expect credit to tighten and operating expenses to rise.

Key questions discussed in this report:

• What is the current state of the U.S. credit card market?
• How is the market growing?
• How are economic factors affecting the way issuers approach risk and opportunity?
• How are rising charge-offs and the potential for consumer bankruptcies linked, and how should card issuers get in front of them?

Companies Mentioned:

American Express, Bank of America, Barclays, Capital One, Chase, Citi, Citizens Financial, Comerica, Discover, FICO, Fifth Third Bank, Fiserv, Goldman Sachs, KeyCorp, M&T Bank, Mastercard, Synovus, TD Bank, Truist, U.S. Bank, USAA, Visa, Webster Financial, Wells Fargo , Zions Bancorp