Credit card issuers are reporting record-setting quarterly revenue for the third quarter, but one of the biggest drivers for growth for the industry is the surging popularity of credit cards that have become a staple in the lives of consumers and businesses.
“Credit card spending grew by $1.1 trillion to $5.5 trillion, which represents a $5,000 average increase in spending per credit cardholder,” writes Bloomberg’s Mark Mahaney in his post about the figures.
“The average credit card spending increase is about 6 percent, which translates to $3,600 in annual spending per cardholder.”
The growth in credit card use has coincided with a surge in interest rates on cards.
Rates on credit cards have skyrocketed, and this is likely due in part to the rise in the popularity of cards and the lower interest rates.
In a market that has long been dominated by credit cards, interest rates have become more of a priority as the U.S. economy has become more dependent on credit.
Interest rates on credit card accounts have remained relatively stable, however, which is encouraging to some.
The average interest rate on a credit score increased from 2.95 percent to 3.95% in the third-quarter, according to CreditCards.com.
In 2016, the average credit score rose to 3,942, which was an increase of 1,094 points, the company said.
The annual growth of the average annual credit score was also the highest since 2010, according the company.
The average credit credit score is expected to rise again in 2018.
For consumers, the growth in card use is likely to help to lower interest costs.
The credit card growth rate in the U: U.K., United States and Australia was at 2.4 percent in the quarter, up from 2 percent in 2016.
In Japan, the rate was 1.9 percent, up 4.3 points from last year.