Credit cards are an important product in consumer finance. On the one hand, credit cards revolving credit function helps to smooth cardholder expenditure; on the other hand, the high cost of credit cards can also harms cardholders. Sunshine Research Center For Financial Innovation, THUIFR, investigated the revolving credit card market situation in the US credit card market through analysis of the US Consumer Financial Protection Bureau data, drawing the following conclusions:
- Many cardholders(30 million people, accounting for 50% of the active cardholders and equal to 12% of the adult population), are using revolving credit, of which the number of super prime credit cardholders with the highest level of credit are 12 million at most.
- The lower the credit level, the more likely the cardholder is to use revolving credit. In addition to 30% of super-prime credit score cardholders, over 70% of other credit level cardholders use revolving creditwhile nearly 90% of deep sub-credit score cardholders use revolving credit.
- The cardholder's average debt is $5,700, and the amount of debt with low credit level is less; Cardholders with a prime credit score had an average debt of $9,000, and those with a deep subprimecredit score had an average debt of $3,000.
- The average cost of credit cards is 17.8% per year, and the lower the credit level, the higher the cost; The total borrowing costs of cardholders with super prime credit score and deep subprime credit score exceeded 32.09%, with penalty interest constituting the main component of fees.
- Most of the revolving loans have been paid off within a year, among which more than 50% of the cardholders whose borrowing cycle is less than three months;
- Some cardholders with high credit level have gradually rising debt. Low credit cardholder debt remained unchanged or fell, with about a third of high credit cardholder debt rising month by
