The number of new credit card accounts (those opened in the previous 24 months) rose to 88.1 million, driven in part by a 16% increase in new subprime accounts. Even with this increase, subprime accounts continue to comprise roughly one-fifth of total open accounts — equivalent to 2012 levels.
According to the American Bankers Association’s latest Credit Card Market Monitor (4Q/16), the gains occurred across subprime (up 5.1%), prime (up 8.5%), and super-prime (up 9.7%) risk tiers.
Average credit lines also rose across risk tiers as last year came to a close. Among new accounts, super-prime cardholders saw the largest increase relative to the third quarter (up 2.7% to $10,202), while prime and subprime credit lines also increased to $5,571 (up 2.0%) and $2,536 (up 1.1%), respectively.
Meanwhile, average early stage delinquency (30+ days) for the first quarter (1Q/17), among the nation’s Top 4 issuers, decreased 5 basis points (bps) sequentially, but rose year-on-year (YOY) by 24 bps, according to CardData.
Citibank and Capital One posted small downticks in 1Q/17. Citi is skewed by its rapidly growing outstandings from the acquisition of the American Express/Costco cobrand deal. Cap One is somewhat skewed by first quarter seasonality and 37% of its portfolio scoring less than 660 FICO.
U.S. Bank (USB)’s Payment Services division reported solid growth in gross dollar volume (GDV) as well as credit and debit fee revenue for the first quarter (1Q/17). However, rapidly rising charge-offs depressed credit card income, according to CardData.
Credit card charge-offs (CO) for USB Payment Services in 1Q/17 increased 26 basis points (bps) quarter-to-quarter (QTQ) and up 44 bps YOY. For 1Q/17 the CO ratio was 3.70%, compared to 3.44% in the prior quarter, and 3.26% one-year ago.