Marketing credit cards to college students is on the decline, according to a recent report from the Consumer Financial Protection Bureau.
Aggregate metrics point to a market in decline, the bureau said, continuing general trends observed over the past decade. Two issues have exited the market, and no new ones have entered it. Alumni associations continue to represent the bulk of organizations entering into agreements with credit card issuers.
The data, which go up to the end of 2018, shows the first year-over-year decline across five metrics since 2011: issuers (39), agreements (256), year-end open accounts (715,442), payments by issuers ($22,397,547) and new accounts opened (55,381). Of those five categories, only the number of issuers saw a net increase over the past decade, from 18 in 2009.
Bank of America had the largest number of agreements at 74, followed by Pennsylvania State Employees Credit Union with 36, Commerce Bank with 27, U.S. Bank with 24 and UMB Bank with 21. The two issuers who exited the market, Nationwide Bank and Banco Popular de Puerto Rico, accounted for seven agreements, 16,373 accounts, and $331,865 in payments in 2017.
Slightly more agreements were terminated in 2018 compared to 2017 (25, up from 20) and fewer new agreements were originated (11, down from 30).
Agreements with alumni associations increased as a share of all agreements, open accounts, new accounts, and payments. In 2018, the share of such open accounts and payments reached nearly 70 percent and over 80 percent, respectively, the highest such shares yet observed in the data.
The Credit Card Accountability, Responsibility, and Disclosure Act the CFPB to submit an annual report to Congress and to make it available to the public. This is the tenth such report, and seventh submitted by the CFPB (prior to its creation in 2011, the Federal Reserve Board prepared the report).