Three indicators signal
risk for the U.S. credit card industry: New account bookings surged since 2011.
Active credit card lines now exceed $3.4 trillion. And, 30-day credit card delinquency
deteriorated in first quarter 2017.
Mercator Advisory Group’s latest research, U.S.
Credit Card Debt: Circle the Wagons and Fortify, discusses the rapid
post-recession buildup in consumer credit card debt in the United States and
why credit card issuers must ensure their operations are running at full speed
to protect against an upcoming wave of potential write-off, which will
translate into lower credit card industry profits and balance sheet risk.
According to the report, U.S. households are adding new
credit despite sky-high volumes of outstanding credit card debt, auto finance,
and student loans. Adding new customers and coming up with new payment tools is
exciting, but issuers need to keep their eye-on-the ball particularly since the
lending growth is outpacing household income growth.
“From a lender’s lens, growth is terrific, but from an
investment view, question arises: Can the U.S. household carry all this debt?
Bankers need to harness their credit card portfolios with leading-edge
collection tools and execute the right strategies to rehabilitate fragile
household budgets. The focus needs to be on collection tools, technology, and
staff development,” commented Brian Riley, Director, Credit Advisory Service,
Mercator Advisory Group, author of the report.
This research report is 21 pages long
and has 10 exhibits.
Companies mentioned in this report
include: ACI Worldwide, American Express,Bloomberg Markets,
Capital One, Celeriti Fintech, Citi, Discover, Experian, Equifax,FICO, First Data, FIS, Fiserv,
LexisNexis Risk Solutions, MasterCard, New York Times, SAS, Saylent Technologies, TransUnion, USA Today, and Visa.