As consumers paid off debt in 1992, they relied on their bank cards more for convenience than credit, a survey of 209 U.S. banks showed.

The American Bankers Association's 1993 Bank Card Industry Report, released last week at its annual bank card conference in Washington, found a 12.6% increase in transactions last year. But the number of accounts carrying balances declined by 6.9%, to 110.4 million, reversing a 4.8% increase in 1991.

Further indicating the trend to convenience use, the 12.6% growth in payment volume was almost double the 6.5% in 1991; and finance charge growth was down to 2.8%, from 11.9%.

Balance Growth Halved

MasterCard and Visa outstanding balances grew, however, by 3.71%, or $12 billion, to $172.7 billion. The growth rate was about half the 8.2% reported for 1991. But the total number of accounts grew by 10%, to 183.3 million.

The two card associations have said that growth rates are accelerating for 1993, and some observers project a return to double-digit growth in outstandings and well as payment volume.

A study by Visa U.S.A., called Marketplace 2000, concluded that card outstandings would rise at a compound rate of 13.6% a year through 2000, outpacing all consumer credit categories except home equity.

In the ABA report, the number of new standard and gold bank credit card accounts jumped an average 61% last year, while the number of accounts closed rose by 47%.

ABA's survey of 209 card-issuing banks, conducted with help from KPMG Peat Marwick, also confirmed a rapid move into debit card products.

The proportion with debit programs ranged from 43% of the smallest banks in the survey (less than $50 million in credit card outstandings) to 87% of the largest (more than $750 million in outstandings), compared with a range of 10% to 18% in 1991.

Bigger Menus

The debit trend may have been exaggerated by more accurate reporting this year, as many banks' credit and debit card operations are becoming less separated, if not integrated.

The survey uncovered a variety of credit card plans and pricing options. Smaller issuers, for example, generally charged lower interest rates and fees, while larger programs tended to offer a greater number of enhancements and interest-rate options.

At yearend 1992, the most common rate for standard cards varied from 15.8% at the smallest issuers to 18.13% at the largest issuers. Gold card rates ranged from 14.58% to 16.99%.

more than 85% of card programs offer a grace period of 25 to 30 days. More than 80% of the largest issuers offered four or more rate options, and 28% offered tiered-rate products.

Nearly 150 billion cash advance transactions in 1992 created an 18% growth rate, reaching $38.9% billion.

Late Payment Declines

Bank credit card delinquencies dropped 14.5%, to 4.3% of total dollars owed. Visa and MasterCard issuers charged off $8.8 billion, a 9.5% rise.

Bigger issuers found an increase in card fraud, as their average loss per case rose from $783 in 1991 to $1,163. The number of accounts charged off by banks dipped 2% to 510,000.

The ABA publishes detailed findings from the survey, covering issues and statistics in areas ranging from fraud and collections to marketing and pricing, in a 100-page book available to members at $595 and to others at $895.

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