By the numbers: Major US credit card issuers highlighted growing credit card spend in their Q3 2023 earnings.
Why it matters: The strength of consumer credit card spending paints a more positive picture than we predicted. We expected that declining consumer sentiment would translate into slower or negative credit card volume growth this quarter.
But growing credit card spend isn’t all good news.
The impact: Issuers need to be wary of rising delinquency rates.
However, it’s not cause for concern quite yet: Total overdue debt balances across all lengths of delinquency are remarkably low and sit well below pre-pandemic levels, according to data from the New York Fed. And both JPMorgan and Wells Fargo lowered their loan loss provisions in Q3, while Citi’s was flat—a vote of confidence for the US consumer.
The big takeaway: Despite some positive notes, Q3 was not without its share of economic warning signs. Issuers may want to tweak their offerings to help consumers remain financially stable, especially for demographics that are more at risk, like Gen Zers and households with children.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a three-times-weekly recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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