Credit Card Users Increased 7% in Last Five Years
The percentage of credit card users in the U.S. has risen more than 7% from 2015 to 2019, according to Private Label Credit Cards in the U.S., 11th Edition, a report by market research firm Packaged Facts.
The uptick in credit card use underscores two important trends:
- steady economic growth and an increasingly healthy job market have helped to provide a widening pool of credit-worthy credit card customers
- ecommerce plays an increasingly important role in consumer purchasing, where payment cards are front and center and cash and check are afterthoughts at best
Things get interesting when examining credit card usage further. Packaged Facts found that trends by card type diverged: the percentage of adults having general-purpose credit cards increased well above the flat growth notched by store credit cards. This suggests that, after several years of growth, private label cards may be challenged to increase their audience.
In the report, Packaged Facts estimates that private label credit card purchase value grew at an average annual rate of 2.7% from 2016 to 2018, reaching $210 billion. Synchrony Financial contributed 49% of this amount, followed by Citi Retail Services with 23%. Private label credit card loan receivables reached an estimated $157.4 billion in 2018, up an average of 5.9% annually from 2016. Synchrony Financial's private label credit cards again contributed 49% of this amount, with Citi Retail Services contributing 23%.
Growth challenges in the private label credit card market include competition from installment loans and the threat of increasing credit risk. But the greatest threat to private label credit cards may be co-branded credit cards. In the meantime, the industry continues to aggressively pivot to technology, honing data analytics capabilities to target client customers more precisely and effectively in the effort to turn that targeting into consumer purchasing behavior.