Credit card comeback from recession nearly complete

0
173


[ccpw id=”6606″]

New card accounts just a hair below 2008 levels

Sabrina Karl

Personal Finance Writer
Data whiz and visual storyteller

 

When
the financial crisis hit at the tail end of 2007, card issuers immediately
tightened the purse strings on new credit, especially to consumers with
subprime scores. As a result, the number of new card accounts plummeted, and
only recently – almost a decade later – have they again approached
pre-recession levels.

The
American Bankers Association has tracked the number of new credit card accounts
every quarter since the start of 2008. Defined as cards opened within the last
24 months, early 2008 saw 91.7 million new accounts.

Fast
forward about 10 years to the third quarter of 2017, the ABA’s latest reading,
and new card accounts have finally reclaimed virtually all of their lost
ground, sitting just shy of the high-water mark at 91.6 million new cards.

But
the storyline includes three subplots, when prime, subprime and super-prime
accounts are spotlighted separately. For the middle-tier prime accounts, their
post-recession history roughly mirrors that of total new accounts. Though 2016
saw prime accounts climb past the 2008 peak, since then the number has crept only slowly
upward to 30.6 million new cards, putting them just slightly ahead of the 29.5
million seen pre-recession.

Meanwhile,
subprime accounts, or those opened by consumers with a credit score below 680,
plunged the most dramatically during the recession and have only partially
recovered. Compared to the 34.6 million new cards in early 2008, new subprime
accounts have crawled back to just 27.3 million by 2017 Q3.

All
three credit tiers saw deep valleys in the second half of 2010, but the
recovery trend for new super-prime accounts – opened by consumers with a credit
score of at least 760 – has ascended the most quickly. New super-prime accounts
surpassed their 2008 level of 27.6 million cards by early 2014, and have kept
rising to a 2017 Q3 reading of 33.6 million.

The
American Bankers Association releases its Credit
Card Market Monitor
 every quarter, drawing on data from a nationally representative sample provided
by Argus Information Services. Its report on 2017 third quarter data was
released Jan. 30.

See related: Recession-era bankruptcies finally falling from consumers’ credit reports, Americans’ average FICO score hits all-time high, More infographics

To use the graphic on your site, use the following code:

<center><a href=”http://www.creditcards.com/credit-card-news/new-card-accounts-pre-recession-levels.php”><img alt=”CreditCards.com Infographic: Credit card comeback nearly complete” border=”0″ src=”http://www.creditcards.com/credit-card-news/images/new-card-reaching pre-recession-levels.png.” /></a> </center>




Original Source