NEW YORK—A new report indicates that banks are giving away credit cards “like it’s 2008.”
The report, from Business Insider, reviewed third quarter earnings reports from some of the largest card issuers in the country which showed that they are handing put plastic to customers at a very rapid pace.
The news follows a CUToday.info story that reveals that the pace of bank card balance growth is exceeding that of credit unions through the first half of the year. If that trend holds through December, it will mark the first time the rate of bank balance growth has exceeded CU balance growth since 2004.
Business Insider noted that Bank of America Merrill Lynch stated in its latest earnings release that its new U.S. consumer credit card issuance hit the highest level since 2008.
“The bank issued 1.3 million credit cards during a three-month period, with total credit card loans for the period averaging $88.2 billion in the U.S. and a further $9.7 billion outside the U.S.,” Business Insider reported
Citigroup reported that credit card loans hit $147.8 billion, up 13% from a year ago. And at JPMorgan, 2.7 million new accounts were opened during the third quarter, sending JPMorgan's credit card balance to $133.4 billion, up 5% from a year ago, Business Insider stated.
Big banks’ increased attention to credit cards is a concern analysts have shared for CU credit card portfolios. Tim Kolk, principal at TRK Advisors, Peterborough, N.H., stated that it’s time for credit unions to step up their efforts in rewards to meet what banks are offering or risk losing cardholders.
Business Insider stated that much of the growth in bank credit card has been with lower credit scores.