Credit Card Trends

The average American now has only one or no credit cards, according to an analysis of Equifax data by the Federal Reserve Bank of Cleveland. The percentage of the population without a credit card grew from 16 to 24 percent between 2009 and 2011, a trend that occurred in every age group.

Are banks closing these credit card accounts or are consumers shutting them down? To determine the direction of causality, the Fed analysts looked at whether applications for credit had fallen between 2007 and 2011. Answer: yes, especially among consumers with high levels of debt (down 33 percent). But even those with low levels of debt had reduced their credit applications (down 20 percent). "Our analysis shows that consumers have likely played a larger role in the credit decline than banks have," the researchers conclude.

Source: Federal Reserve Bank of Cleveland, Americans Cut Their Debt