U.S. Card Issuers: Slower Credit Card Spending Growth in Q2 2024, Stabilization in Sight for Credit Performance

This commentary reviews key trends from the Q2 2024 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 spending for the top six general purpose credit card issuers increased by 4% YOY in Q2 2024, propelled by affluent cardholders, but the growth rate has decelerated.

-- Similarly, credit card balances for the peer group grew 9% YOY to $840 billion, still growing robustly by historical norms but at a decelerating rate of growth since Q4 2022.

-- The net charge-off (NCO) rate increased in the quarter. The 30+ day delinquency rate group was 2.7% at June 30, 2024, lower from the prior quarter. Notably, the YOY increase in the 30+ day delinquency rate moderated further, indicating that the NCO rate is likely approaching a plateau in H2 2024.

"The overarching sentiment among card issuers during the recent earnings calls was that U.S. consumers remain fairly resilient but higher interest rates and inflation have weighed more heavily on lower-income households." said Yanni Koulouriotis, CFA, Vice President - North American Financial Institution Rating. "Overall, Q2 2024 results reaffirmed our expectations and remain supportive of our current credit ratings for U.S. credit card issuers."