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  • Frank Tian

US Banks Q2 Cards

Actions don’t always match feelings.


As confirmed by the credit card numbers in Q2 earning reports.


Credit card purchases had a strong quarter, despite lower consumer confidence.


This illustrates the advantage of a diversified business model - the credit card engine fires up when mortgage and trading are muted.


Let’s look at the top 4 US banks in the last 3 years


🟩 Credit card sales in Q2 ‘22 up 38% vs. Q2 ‘19.


Consumers opened up their wallets when the pandemic is in the end game, despite lower confidence with high inflation.


🟦 Credit card balances in Q2 ‘22 are still down 3% vs. Q2 ‘19.


Why such a big gap between credit card sales and balances?


Consumers have cash in the bank. Excess savings fueled the POS sales but suppressed card balances.


Moody’s Analytics estimated that US consumers still had 2.5 trillion excess cash vs. pre-pandemic as of May ‘22.


Any recession in the near term will be a very different one - at least we start with a strong job market and financial cushions for consumers.


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