Credit Card Spending Rises, But So Do Payments

That’s the share of U.S. credit cardholders who paid their monthly balances in full in the second quarter, a record high for any quarter dating back to at least 2008 and a sign that the pandemic pushed people to keep their spending manageable.

According to the American Bankers Association’s latest quarterly Credit Card Market Monitor report, released Tuesday, that share is up 2 percentage points from the prior quarter. And consumers are paying off balances at a higher rate even though they’re spending more. Monthly purchase volumes rose more than 13% from the first quarter as the labor market improved, ABA said, and credit card use hit higher levels than before the pandemic began.

“The data suggest that consumers remained focused on keeping credit-card balances manageable and spending within their means,” said ABA Chief Economist and Head of Research Sayee Srinivasan in a statement.

ABA also noted that the share of cardholders who carry a monthly balance fell 2 percentage points to an all-time low of 38.5%. As a result, consumers are paying less money in interest on their credit card purchases. The interest paid relative to the total amount of outstanding credit fell to 12.32%, the lowest level since 2017, from 12.74%. 

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