To make the upcoming holiday season merry and bright, will consumers start using their credit cards again? It may be too early to tell.
As reported in our just-released Q3 2020 Industry Insights Report, since the pandemic started average consumer-level credit card balances have declined across all credit risk tiers from $5,668 in Q3 2019 to $5,075 as of Q3 2020. Total bankcard balances also fell to $723 billion, a decline of more than 10% year over year and the lowest level since Q2 2017.
That bucks a three-year trend. Between the third quarters of 2017–2019, consumers consistently increased the balances of their private label and general purpose credit cards, and those increases continued during the fourth quarter holiday shopping season.
Declining credit card balances in recent quarters may point to more of the same this holiday season.
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