Credit card lending has seen major growth in the past decades. With that growth has come almost unparalleled concentration. Today, about half of all credit cards are issued by giant banks, who also dominate the amount of total credit extended.
That large share of loans maps up with the growth in use of cards and with an overall economy trending toward consumer spending. Consumer credit lending spiked after the financial crisis and recession of 2009, and has been on a steady incline since 2015. Credit card lending has grown from about $200 billion in 1994, to more than $900 billion in 2018.
Banks are expanding their consumer credit profiles at the expense of productive lending. High-interest credit cards net banks bigger fees from both consumers and businesses, and the big banks have the credit card market nearly entirely to themselves. More than half of all credit cards are issued by the Big Four: JPMorgan Chase, Citigroup, Wells Fargo, and Bank of America. Interchange fees—the “swipe fee” retailers pay to the banks in order to process cards—netted banks $64 billion in 2018, more than doubling the revenue of 2012. The more cards are used, the more money banks can collect from consumers and businesses on secondary charges like interchange or overdraft fees.
See more of our banking charts and data here.
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