FIs Banks Grow More Optimistic on Credit Cards in Q2 as Consumer Spending Ramps Up

Credit card loans at U.S. banks fell just short of growing year-over-year in the second quarter, a dramatic improvement from the past several quarters, each of which showed credit card portfolios shrinking rapidly.

Credit card loans fell 2.0% year over year, compared to a 12.8% drop in the previous quarter, according to data from S&P Global Market Intelligence. Large card-issuing banks are growing more optimistic as consumer spending accelerates, with some banks pointing to account growth nearing pre-pandemic levels and others expecting to reach loan growth by the end of the year.

Banks have struggled with sluggish loan growth for more than a year, due partly to government stimulus inflating deposit levels and allowing more consumers to spend without resorting to credit cards. A return to loan growth would help shore up banks' core revenue source, net interest income.

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