After a three year decline, consumer credit card growth is showing signs of improvement.
Total outstanding credit card debt has been down for nearly three years and consumers remain reluctant to add to their overall debt burden as the economy recovers, CollectionsCreditRisk.com reports.
Data released by Equifax Inc. on July 1, however, indicates that new bankcard account originations increased 35 percent from March 2010.
The increase in new card accounts is not only attributable to an increase in the number of new cards, but also, in a sign card lending competition is heating up, with higher lines of credit available.
Credit lines also expanded incrementally, though Equifax did not indicate by how much nor did it release the total number of new consumer credit card accounts issuers opened, CollectionsCreditRisk.com reports.
Auriemma Consulting Group conducted a study among 1,026 consumers in March that indicated consumers are spending less monthly on credit cards than they were before the recession and their outstanding credit card balances are lower.
“For a broad swathe of consumers, the recession is not over,” Patricia Sahm, the managing director at Auriemma, said, according to CollectionsCreditRisk.com. “During the recession we saw a major shift in the way people used credit cards that caused them to pull back on credit card spending, protecting their credit lines for emergencies, while turning to debit cards for everyday purchases. Those habits have not shifted back to the way it was before the recession.”