Total credit lines among the top five U.S. credit card issuers soared 56.5% to a peak of $3.74 trillion in 2007 from an aggregate $2.39 trillion in 2005 following the rise of home prices during the first half of the decade. But as the bubble burst in 2007 and housing values began to decline, followed by two years of recession, credit card customers defaulted on their accounts en masse, PaymentsSource data show.
Issuers subsequently closed millions of accounts and sharply pared credit lines. The top five card issuers’ total aggregate consumer credit lines fell 23.3%, to $2.87 trillion in 2009 from their peak two years earlier.
Most top issuers ended 2009 with total credit lines roughly similar to 2005 levels. (Bank of America Corp.’s credit-line surge beginning in 2005 was caused in part to its acquisition that year of MBNA Corp., which boosted BofA’s available credit lines by 317%, to $1 trillion in 2006 from $239.9 billion in 2005).
