U.S. Card Issuers: Sound Balance and Spending Growth in 4Q23; Credit Performance Continues to Weaken, but Peak Likely in 2024

This commentary reviews key trends from the 4Q23 results of the top six general purpose credit card issuers in the U.S., as well as the outlook for the sector.

Key highlights include:

-- Credit card balance growth was 12% year-over-year (YoY) with balances reaching $837 billion at December 31, 2023.
-- Delinquency trends continue to be a key watch item for us given the upward trajectory in 2023 despite historically low unemployment.
-- For 2024, we continue to expect the U.S. credit card industry's spending growth to remain in the mid-single digit range.

“Based on our current macroeconomic outlook, our expectations for the U.S. credit card sector's credit performance is unchanged as we anticipate further weakening but stabilization within normalized levels towards year-end to early 2025.” said Yanni Koulouriotis, CFA, Vice President - Global FIG.