Credit Card Issuers Will Earn $159 Billion This Year
According to a new report from R.K. Hammer, U.S. credit card issuers will generate $158.6 billion in revenue this year. That is a 9% increase from the $146 billion in 2013, and only 6% less than the debt peak back in 2008.
Credit card debt has been on a decline since 2008, with this being the first increase in six years.
“The current state of the industry is very, very healthy,” Eileen Serra from J.P. Morgan’s credit card sector told The Wall Street Journal.
Outstanding revolving consumer debt rose 3% in the second quarter to $839.1 billion, and then in July, it went up to $845.3 billion, according to the Federal Reserve. Most of the revolving consumer debt in America is attributed to credit card balances.
The national credit card delinquency rate dropped to 1.16% in the second quarter, which is the lowest it has been in seven years. It appears as though shoppers are willing to spend more money on their cards, but they also have the means and the discipline to make their payments on time.
“The industry is benefiting from an extraordinarily low level of [defaults] that is lasting longer than most people expected,” said Roger Hochschild, president of Discover Financial Services.