CFPB Finds Two-Thirds of Active Cardholders Don’t Pay Balances in Full

WASHINGTON—A new report from the CFPB reveals that two-thirds of actively used credit card accounts don't pay off the full balance at the end of the billing cycle.

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Those accounts that carry a revolving balance do so continuously for 10 months on average; 15% revolve continuously for two years or more, the report states.

The CFPB report, “Data Point: Credit Card Revolvers,” uses data from the Bureau's credit card database, specifically a sample of large banks' credit card portfolios between April 2008 and April 2016. It focuses on the duration of credit card indebtedness and the manner by which credit card debt is repaid, NAFCU explained.

Key Findings

Other key findings from the report include:

  • Credit score is not a clear predictor of repayment trends
  • Revolvers either take on debt on a particular account and make regular payments on their debt, or revolve about the same amount on a particular account for long periods and then make a lump-sum payment of the balance in full
  • There are geographical trends in how and why consumers choose to revolve balances on their credit cards

On credit score reporting, the CFPB has estimated that 26-million Americans are "credit invisible" because they do not have a credit record. NAFCU noted it has long advocated for the use of alternative models that more accurately capture creditworthy borrowers and permit them access to affordable credit.

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