Credit card lending is back with a vengeance, and so is competition in this usually hard-to-crack market.

Credit provided by card issuers has rebounded since early 2011, with unused lines climbing sharply while outstanding balances have roughly flattened after the free-fall that began during the recession. The biggest three issuers in the country – Bank of America (BAC), Citigroup (NYSE:C) and JPMorgan Chase (JPM) – have given little slack, however, as they have allowed undesirable accounts to run off and sold pieces of their portfolios. (The national data here is taken from a quarterly report by the Federal Reserve Bank of New York, and the data for holding companies is taken from financial reports made to regulators. Use the dropdown in the graphic below to select an individual institution or to see national aggregates. Text continues below.)

Instead, smaller competitors like BBVA USA, the holding company for Compass Bank in Birmingham, Ala., and TD Bank have posted blistering growth rates, often from small bases of receivables.

It’s not so much that the industry’s giants are sitting out the turnaround in loan performance as it is that they have been challenged by large cleanup efforts, from the former Washington Mutual portfolio that JPMorgan Chase said it would slash when it bought it in 2008 to Bank of America’s admission that it had given up too much on credit quality in pursuit of revenue.

Indeed, among the Big Six, Capital One (COF) stands out for its relentless growth. Even before its acquisition of about $30 billion of receivables from HSBC Holdings in May, which drove a 56% jump in its total lines (including drawn amounts) from the previous quarter to $372 billion at June 30, unused lines at the company had been growing appreciably, and utilization rates, or outstanding balances as a percentage of total lines, had been dropping.

The numbers could reflect Capital One’s strategy of rotating away from large-line customers who tend to carry balances from month to month because of concern over their ability to withstand financial pressure. Like the rest of the industry, the company has refocused on high-credit-quality customers who tend to spend a lot on their cards relative to the amounts they borrow, and who are typically awarded high credit limits.

The card business remains concentrated, and is likely to stay that way because of scale advantages. But the recession’s trauma and incumbents’ reengineering of their operations have created space for other players.

Regional banking companies have been buying card portfolios bearing their brand names that they had farmed out to larger issuers. U.S. Bancorp (USB), which posted 9.6% growth in total lines from the first quarter of 2010 to $83.2 billion in the second quarter this year, has also bought card assets. It said in July that such deals were among the few acquisitions it was focusing on during what it described as a “quiet environment” for mergers. (Total lines can provide a smoother picture of credit supply since seasonal spikes in spending at the end of the year can put jagged kinks into utilization rates.)

If disruptions have drawn more lenders to the field, however, competition may only become fiercer. As outstanding balances have trended sideways, the New York Fed reported that credit inquiries, an indicator of consumer demand, fell for the second consecutive quarter. The upshot: more lenders chasing a stagnant pool of customers.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.