Credit Card Growth Led by Credit Unions

Growing at nearly four times the rate of banks’ card portfolios, credit union credit card loans are gaining momentum.


Credit card loans have risen 8.3% over the past year to $24.5 billion. The annual growth rate is nearly four times the 2.2% rate posted by banks and savings and loans (S&Ls) during the past twelve months.

What is driving the growth?

Data indicates that credit card loan growth occurred due to increasing member usage, rather than new accounts. The number of credit card accounts has essentially remained steady for the past year at 12.2 million, while the average credit card balance grew by 8.6% to $2,001.

Although the growth in balances might lead to some concern that card users are becoming overextended, credit card loan quality remains sound in credit unions. The delinquency rate is improving, moving to 0.96% as of June from 1.19% a year ago. The charge-off rate is also down, 1.7 % versus 2.1% in June 2005. Both the delinquency and charge-off rates posted by credit unions are about half of those posted by banks and S&Ls as of June.

What does this mean for credit unions?

Although credit card portfolio sales by credit unions have continued, the number of credit unions selling is declining year after year. Credit unions that are retaining their portfolios are investing in their card programs; many are working with their processors to generate growth in their portfolio. Sharing successful strategies across the industry appears to be yielding results for credit unions, providing them with a quality, high-earning asset.

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Sept. 11, 2006


  • we have long had an active CC portfolio. Credit cards also provide a better yield and wider margin than other loans. We are in the process of converting our entire line into a series of rewards cards each targeted at different markets. I can't undeerstand why so many CU's have sold thier cc portfolios in recent years.
    Bill Earner
  • This is not an accurate article.