CFPB report on state of credit card market shows increases in card debt

In its biennial look at the credit card market, the Consumer Financial Protection Bureau (CFPB) reported that credit line, number of accounts, average card debt, and enrollment in online services have all increased in recent years.

The report found that the average credit card debt jumped 9 percent since 2015, the last time the CFPB analyzed the data. Balances for cardholders with low credit scores have seen debt rates increase at a faster rate.

The total amount of credit line, which is the amount of debt a consumer is permitted to have on an account, was $4 trillion as of mid-2017. This is the up from 2015, but still below a mid-2008 high of $4.4 trillion.

New credit card originations have also increased. In 2016 alone, consumers opened around 110 million new credit card accounts, which is roughly 50 percent higher than 2010 and a higher total than in any single year since 2007. About 169 million consumers had at least one credit card as of mid-2017.

Also, about 60 percent of active credit card accounts are enrolled in online services, using their computers or phones to track spending, pay their credit card bill, and conduct other account activities.

In addition, interest rates and fees have remained largely stable while delinquency rates have modestly increased.

Finally, more consumers are signing up credit cards that require a cash security deposit. The amount of new secured cards was 7 percent higher in 2016 than in 2015. Secured cards are typically used to build credit history, so the increase is driven by consumers with bad or no credit scores.