U.S. Card Issuers: Strong Balance Growth Momentum Persists in 1Q23; Delinquencies Nearly Back to Normalized Levels

This commentary reviews key trends from the 1Q23 results of the top six general purpose credit card issuers in the U.S.

Key highlights include:
• Card balance YoY growth was sustained close to 18% for a third consecutive quarter totaling $735 billion at March 31, 2023. Payment rates have eased from historic highs.

• The U.S. credit card purchase volume for the top six credit card issuers increased by a solid 11% YoY to $945 billion in 1Q23, slightly faster than the 10% YoY growth in 4Q22. Nonetheless, in the second half of the quarter there was notable slowdown in credit card spending growth.

• Credit performance metrics in 1Q23 continue to be lower yet much closer to pre-pandemic levels relative to the preceding quarters.

“Over the coming quarters, we anticipate credit performance metrics to reach or potentially exceed pre-pandemic levels but to remain manageable for the credit card issuers, in the absence of a sharp economic contraction and as long as the unemployment rate does not increase significantly. Further, we expect credit card spending growth to remain solid but to continue to decelerate to the mid-to-high single digits rate should consumers become more cautious due to the economic uncertainty.” said Yanni Koulouriotis, CFA, Vice President - Global FIG