A Boom in Credit Cards: Great News for Banks, Less So Consumers
- 7 years ago
A Boom in Credit Cards: Great News for Banks, Less So Consumers
Such surprisingly strong performances — the four leading banks raked in a total of $21 billion in profits during the third quarter — helped propel shares of banks like JPMorgan
and Bank of America to their highest levels in years.
Outstanding credit card debt — the total balances that customers roll from month
to month — hit a record $1 trillion this year, according to the Federal Reserve.
A recent analysis of Federal Reserve data by the debt-rating firm Moody’s found
that working-class families, those with a median income of about $33,000, were starting to spend a higher portion of their income — slightly more than 15 percent — on debt payments, compared with what they spent three years earlier.
At Citigroup, an exclusive card deal with Costco — in which the bank provides branded credit cards to the discount-retail
giant — has been “a real winner,” said John C. Gerspach, Citigroup’s chief financial officer.
The four top American banks — Bank of America, JPMorgan Chase, Citigroup
and Wells Fargo — together made more than $4 billion in pretax income from their credit card businesses from July through September.
Such surprisingly strong performances — the four leading banks raked in a total of $21 billion in profits during the third quarter — helped propel shares of banks like JPMorgan
and Bank of America to their highest levels in years.
Outstanding credit card debt — the total balances that customers roll from month
to month — hit a record $1 trillion this year, according to the Federal Reserve.
A recent analysis of Federal Reserve data by the debt-rating firm Moody’s found
that working-class families, those with a median income of about $33,000, were starting to spend a higher portion of their income — slightly more than 15 percent — on debt payments, compared with what they spent three years earlier.
At Citigroup, an exclusive card deal with Costco — in which the bank provides branded credit cards to the discount-retail
giant — has been “a real winner,” said John C. Gerspach, Citigroup’s chief financial officer.
The four top American banks — Bank of America, JPMorgan Chase, Citigroup
and Wells Fargo — together made more than $4 billion in pretax income from their credit card businesses from July through September.