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The financial lure of credit cards has become increasingly hard to resist for regional banks that exited the business several years ago.
September 16 -
American Express, Wells Fargo and Citigroup are continuing to sell controversial credit card payment protection and monitoring services, even as the industry braces for a second round of regulatory crackdowns.
September 16 -
Data providers are aggressively marketing products aimed at providing lenders a better picture of consumers who don't have credit reports, but significant barriers are slowing the growth of alternative inputs for credit scores.
June 20
Bank card originations increased sharply last quarter, reaching their highest level since the financial crisis as more creditworthy customers took out new cards.
Total bankcard origination volume rose 21% in the second quarter compared with the same period in 2012, according to an analysis released Wednesday by the credit bureau Experian. Banks originated cards with a total credit limit of $69 billion last quarter, compared with $57 billion in the second quarter of 2012 and $59 billion in the first quarter of this year.
It was the highest origination volume since banks issued cards with total limits of $70 billion in the fourth quarter of 2008, according to Experian. Originations peaked at $103 billion in the fourth quarter of 2007, and bottomed out at $37 billion in the second quarter of 2010.
"Bank card originations continue to track with the recovery in terms of steady growth," Linda Haran, a senior director for
The increase was led by issuances to customers with good credit scores, rather than by banks' lowering their credit standards to attract new customers. Banks issued cards with limits of $26.2 billion to customers with "prime" ratings and $16.4 billion to "near-prime" customers. These are increases of 36% and 43%, respectively, over the same period in 2012.
Issuance to less creditworthy customers also rose, but less sharply: subprime issuances increased 23%, to $5.3 billion in total limits.
The higher issuances have not come at the cost of looser credit, as total risk exposure, chargeoffs and delinquencies have also fallen, Experian said.
"Prime and near-prime bankcard utilization rates are not as high as they were a year ago," Haran said in the news release. "This is a positive trend, because it shows that despite an increase in new bank card users, consumers are managing their credit wisely."
