Nilson Report

Issue 1190 | Jan 2021

FEATURED COMPANIES

Companies featured in this issue include:

Outstandings on General Purpose Credit Cards in the U.S.

Market Shares of Outstandings on U.S. Credit Cards—2000 through 2020

Investments in Merchant Acquiring and Processing by Region—2020

Investments by Region—Number of Transactions in 2020

Income at Top U.S. Credit Card Issuers—2020 vs. 2019

American Express Cards 2020 vs. 2019

Discover Card 2020 vs. 2019

Investments and Acquisitions—December 2020

American Express Cards 2020 vs. 2019

American Express issues cards directly and in partnership with financial institutions worldwide. Figures for cards issued, transactions generated, and outstanding receivables are listed on page 10.

1. Inside the U.S.
$691.52 billion purchase volume, –16.2%
2. Outside the U.S.
$313.36 billion purchase volume, –21.7%
3. Global total
$1,004.88 billion purchase volume, -18.0%

Full access to the American Express Cards 2020 vs. 2019 results is available when you subscribe to the Nilson Report.

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POSTED JAN 31, 2021 | PRINT

Outstandings on U.S. Credit Cards

Please note: Only subscribers can access the charts included with this article.

Visa, Mastercard, American Express and Discover credit card receivables tied to consumer and commercial products issued in the U.S. dropped 14.9% to $866.28 billion at the end of 2020. This decline, triggered by the negative impact of Covid-19 on commercial and consumer credit card spending, marks the fourth time in the U.S. since the Great Recession when general purpose card outstandings declined. The other years were 2009 (down 10.4%), 2010 (down 8.0%) and 2012 (down 0.2%).  

Outstanding receivables tied to Visa, Mastercard, American Express and Discover cards as a percentage of credit card purchase volume on cards carrying those brands reached a new low of 24.0% at the end of 2020. Since 2000, debt on general purpose cards has grown 49.6%, while credit card purchase volume on general purpose cards has grown 236.9%. 

For over a decade, card debt outstanding as a percentage of credit card purchase volume has steadily declined as issuers offered incentives that succeeded in moving purchases away from cash and debit cards. However, the impact of Covid-19, including the imposition of stay-at-home orders and the near abandonment of travel and entertainment spending, cut the bottom out of credit card purchases in 2020. 

Middle-aged and older consumers, those most likely to make purchases using credit cards, stopped traveling and dining at restaurants for most of the year. Millennials, the largest demographic group in the U.S., continued their practice of favoring debit cards for their purchases. When they wanted credit, they tended to go outside the Visa, Mastercard, American Express and Discover networks to patronize third party providers of buy now, pay later installment loans.

That demographic also continues to be saddled with outstanding student loan debt that exceeds $1.705 trillion, which limits their access to credit. A large segment of millennials are in the nonprime (credit scores below 660) credit category and are not primary prospects for most issuers of revolving credit cards. 

Prior issues: 1168, 1145



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