US Credit Card Business circa 1980s
In the 1980s, credit card spending rose from
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to 4% 8% 1234 4567 7890 0112 1234 11/85 1234 4567 7890 0112 1234 11/85 1234 4567 7890 0112 1234 11/85 1234 4567 7890 0112 1234 11/85
The switch from store credit to general-purpose credit cards lead to an increase in the revolving debt
40% in 1980 70% by 1989
Credit cards were
more profitable than 7 other retail bank products 3-5x
In 1987 nearly 4,000 banks issued credit cards
Top 4 Association cards
15.3 billion Citibank 5.4 billion
Chase 5.2 billion Bank of America 4.6 billion First Chicago
Top 2 Non-Association
General Purpose Credit Card Issuers
5.9 billion Discover
American Express 3.8 billion
Mass-marketing mailings generated a 5%-10% response rate before 1988
Banks used simiple metrics to evaluate creditworthiness
Credit Score & 780 FICO
Debt:Income Ratio
Every cardholder was charged 19.8% interest
&
annual fee
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