Our primary source of information on the spread of credit and debit card use
among U.S. households is from several waves of the Survey of Consumer Finances.
The SCF has been conducted triennially since 1983, and recent waves have each
consisted of about 3,000 households drawn from a standard representative sample,
supplemented with about 1,500 high-wealth households selected on the basis of tax
records. Sample weights are provided to make the data representative of the U.S.
population as a whole. Each wave of the SCF provides detailed information on
household-level holdings of a variety of financial assets as well as sources, terms, and
uses of a wide range of consumer credit options, including credit cards. Data are also
collected on household characteristics including age, education, family structure, race,
and income. Finally, the SCF also asks a number of questions on attitudes towards
consumer borrowing, reasons for saving, and investment decisions.1
In 1983, 65 percent of U.S. households had a credit card of some kind,
including store-specific cards and gas cards (Table 1, column 1). Only 43 percent of
households had a bank-type credit card such as a Visa or Mastercard (column 2); that
is, a card that is accepted at a broad range of retail establishments, and after making a
minimum required payment allows the consumer to revolve the balance if so desired.
By 1992, 62 percent of the U.S. population had a bank-type credit card, and by 2001
that percentage had risen to almost 73. Over the same period, the percentage of
households with any type of credit card increased much less, and in 2001 that
percentage was 76 percent, only slightly higher than the percentage with a bank-type
card. There has also been an increase in the number of bank-type credit cards owned
per household: in 1983, households with a bank-type card typically held only one
such type card. By 2001, one-third of card-holding households still had only one
bank-type card, one-third had two, and about one-fourth had three or four. A little
more than 7 percent had five or more.
Opening of credit card accounts, either for the first time or as accounts in
addition to pre-existing ones, is much more common than other changes in household
portfolios (e.g., those associated with stockholding). Another source of data, the
January 2001 Consumer Survey on Credit Cards, shows that about 20 percent of
bank-type credit card holders had obtained one or more new accounts during the
previous year, and most of these were additional or replacement accounts. According
to the survey, 41 percent of holders held three or more bank-type credit card accounts
(Durkin, 2002). In the remainder of our discussion below, we focus our attention on
bank-type credit cards.