Introduction
Usually, most people are not aware of or don’t pay attention to the fascinating facts about credit cards. These cards provide us with many benefits in return for helping us manage our expenses each month. Although it might be unpleasant to receive a statement with a high outstanding balance at the end of the month, there are also many benefits associated with credit cards. Receiving your statement can be the complete opposite of joy for many people who own credit cards. Yet, the history of these plastic cards is extensive, and they have changed throughout the years. Here are some fascinating facts about credit cards that you didn’t know and that could alter how you view them.
1. Four of the six biggest card brands are based in the US
America is home to four of the top six credit card companies in the world. According to Nelson (Global Cards and mobile payment industry analyst), with 3.66 Billion accounts, VISA holds the number two spot including business, consumers, debit, credit, and prepaid cards.
With 2.45 billion, 115 million, and 65 million cards, Mastercard, American Express, and Diner Club/Discover were in third, fifth, and sixth place. The fourth-ranked issuer is based in Japan, whereas China's issuer is at the top of the list.
2. Rising Number of New Credit Card Accounts
Both consumer debt and the number of new card accounts are rising. According to Experian, consumers opened 14.5 million new accounts in 2020 whereas 14.7 million new card accounts were opened in 2021.
Year | Number of New Accounts |
2019 | 21 Million |
2020 | 14.5 Million |
2021 | 14.7 Million |
3. A New Record of 500+ Million Credit Card Accounts
According to a report by TransUnion CIBIL, roughly 500 million credit card accounts were created. In 2019 it was 439 million accounts, in 2020, it increased to 454 million, in 2021 it was 465 million and in mid-2022 it is roughly 500 million card accounts in the US.
The Federal Reserve estimates that in 2021, 84% of US adults owned a credit card. About half of those cardholders made monthly balance payments. In the previous 12 months, the other half had carried a balance at least once. 73% of respondents who had carried a balance at some point were still doing so at the time of the study.
4. Before applying for credit cards, you can view the rates and costs
Federal law requires credit card issuers to make some conditions, such as interest rates and fees, available to the public before they apply. These are shown in a table known as a Schumer box, which is often located on a credit card application page online or on the slip included with paper applications.
5. Your credit score can suffer if you approach your limit too closely
Your credit utilization ratio is the amount of available credit that you use as a percentage. Your credit ratings might get affected by this. Also, your credit scores may suffer if your utilization ratio rises above a certain point, such as if you carry a load of Rs. 24,500 on a card with a credit limit of Rs. 25,000.
Your credit utilization ratio should be as low as possible. Try to use not more than 30% of your limit at any given time to maintain a healthy score. By doing this, you may make sure that your balance won't be too close to your credit limit whenever the issuer reports the status of your account to the credit bureaus.
Conclusion
For customers, credit cards are a crucial financial commodity. Additionally, they are a part of a large market with dynamic variables, such as shifting interest rates or fresh choices like BNPL loans. Consumers may stay up to date on card trends by using a variety of excellent resources.
Spend some time reading up on the situation while looking for a new card. So that you are aware of your alternatives and the features, restrictions, and advantages of the new cards you are considering.
Your credit card is more complicated than just its terms and conditions. The better they serve you, the more you'll know about them. Hope you learned something new and we hope they'll inspire you to learn more about it.
Read More: Credit Card Frauds: You Should Be Aware Of