Increased Credit Limits Lead to Greater Member Credit Card Usage

Credit unions use a more proactive approach in extending lines of credit, leading to the fastest credit card balance growth in five year.


Credit card balances held by credit unions rose at the fastest rate in five years in 2005. The industry’s credit card portfolio posted 6.3 percent growth for the 12-month period, with balances ending the year at $24.5 billion. A key factor in this growth is a more proactive approach by credit unions to extend greater lines of credit, resulting in higher cardholder balances.

CC Loans Outstanding
CC Loan Growth
CC Penetration
Dec-02 $22,017,284,785 -0.8% 17.80%
Dec-03 $22,195,445,011 0.8% 17.40%
Dec-04 $23,011,391,892 3.7% 16.90%
Dec-05 $24,466,292,408 6.3% 16.70%

Credit unions have seen a decrease in their credit card penetration rates. This can be explained by a 0.6 percent decrease in the number of credit card accounts coupled with an increase in the number of “limited service usage” members who join the credit union through programs such as indirect lending. Despite decreased penetration rates, members who have cards have increased their average balances as credit lines have increased.

Average and total credit card balances have both grown over the past four years, as seen in the chart below. Coinciding with the increase in balances has been an increase in the total lines granted to members.

CC Lines
CC Lines of
Avg. CC Balance
Avg. CC Balance Growth
of Credit
Credit Growth
2-Dec $75,059,947,412 1.9% 1,700 2.7%
3-Dec $77,910,495,945 3.8% 1,732 1.9%
4-Dec $81,515,395,243 4.6% 1,848 6.7%
5-Dec $86,490,086,961 6.1% 1,986 7.5%

As more credit unions examine their card portfolio’s performance, many have become more active in reviewing member credit scores and activity. Such reviews can result in line of credit increases for members who are using credit wisely. The benefits of this approach are evident in 2005 results.

To learn about more year-end 2005 trends as well as trends for your peer group, check out the 2006 Credit Union Financial Yearbook.




March 27, 2006


  • Seeing balance increases but what about past due accounts or charge offs?