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Credit Card Use Rebounded in Q2

Credit-card spending, which fell during the first three months of 2014, rebounded in the second quarter, according to a quarterly report by the American Bankers Association released Wednesday (Dec. 17).

Spending by users of subprime credit cards jumped 14.3 percent during Q2, while prime credit-card spending rose 10.3 percent and super-prime account purchases increased 8.2 percent.

In a sign of an improving economy, the share of credit-card users who pay off their balances each month rose by 0.6 points to 29 percent of all accounts. Outstanding credit-card debt as a share of disposable income was little changed at 5.2 percent, a 15-year low.

The number of new credit-card accounts rose 10 percent year-on-year, driven mostly by growth in subprime and prime accounts. The average credit line for new accounts rose slightly for subprime and prime accounts but increased 1.2 percent for super-prime accounts, reflecting lenders' higher "confidence in consumers' ability to manageable their household debt," said ABA SVP Molly Wilkinson.

According to the report, the share of credit-card users whose accounts carried a balance that rolled over to the next month (and thus had finance charges) at least once in the quarter dropped 1.5 percent from Q1 to 41.2 percent, an all-time low. Accounts that were active but had no finance charges were up 0.6 percent to 29 percent, and the number of dormant credit-card accounts rose 0.8 percent to 29.8 percent.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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