Almost a year after credit card loans hit bottom, banks have given little slack in credit lines.
The sum of revolving debt and unused credit card lines peaked at $5.7 trillion in mid-2008 before plummeting more than 30%, to $3.9 trillion, in the third quarter last year.
The figure ticked up by a third of a percentage point in the fourth quarter, but healthy holiday-season borrowing left unused lines to decline once again, to $3.1 trillion.
In all, unused lines have fallen for 12 of the past 14 quarters, according to data from the Federal Deposit Insurance Corp. (Figures for nationwide revolving debt used here are published by the Federal Reserve.)
The decline in lines and lending at Bank of America Corp., once the nation’s largest issuer, is no surprise. The company has been shedding pieces of its credit card business as it attempts to sharpen its strategic focus and shore up its capital position.
At Citigroup., which last year decided to reintegrate its $40 billion-loan private-label business into the core of the company, North American credit card receivables jumped a healthy 3% from the third quarter to $119 billion in the fourth quarter. Total lines dropped 1.5%, to $521 billion, however, and unused lines fell 3%, to $402 billion.
Total lines at JPMorgan Chase ticked up about a third of a percentage point, to $531 billion, but the gain was outpaced by growth in lending, and unused lines continued to drop.
Overall, the growth in borrowing while total lines have held about steady has kept loans as a percentage of available credit high by recent standards. Such credit utilization rates can simultaneously offer perspectives on consumers’ financial resources, willingness to spend and need to borrow to meet expenses.
To be sure, other data has provided signals that revolving consumer credit is becoming more available. More banks have reported easing standards on credit card loans to the Fed than have reported tightening them since late 2010. A quarterly study by the Federal Reserve Bank of New York based on consumer credit reports has shown a pronounced decline in utilization rates in recent periods.
Moreover, more than half of the reduction in credit lines during the current cycle occurred in the fourth quarter of 2008 and the first quarter of 2009 as issuers feverishly sought to cut risk, and much of the withdrawal appears to represent closings of acccounts with no balances.
Still, while issuers are back in the hunt for loan growth, the industry appears to be keeping borrowers on a tight leash.