Economic Snapshot

Current Economic Data

* Third estimate. SOURCES: GDP, Bureau of Economic Analysis;; unemployment and consumer price index, Bureau of Labor Statistics;


1.   Based on the chart below, what happened to the number of general-purpose credit card transactions after the CARD Act? Which type of transactions increased the most?

General-purpose credit card transactions increased, with card-not-present transactions increasing the most.


The Card Act Figure 1

NOTE: Numbers may not add up due to rounding. SOURCE: Federal Reserve System (2013, p. 18).


2.   The CARD Act included provisions to protect young consumers and reformed how credit cards are marketed and issued to students. Based on the chart below, after the CARD Act, what changed for consumers 18 to 20 years of age?

The percent of consumers under 21 years of age who opened a credit card account decreased after the CARD Act. However, the decline started in 2009, prior to the implementation of the CARD Act, so may have been partially caused by the recession.


The Card Act Figure 2

SOURCE: CFPB Consumer Credit Panel.


3.   Based on the table below, which three-year period saw the largest increase in general-purpose and private-label credit card transactions? Does the CARD Act appear to have affected the number of credit card transactions?

The three-year period from 2009 to 2012 saw the largest increase in general-purpose credit card transactions—an increase of 4.3 billion. However, during that same period, private-label credit card transactions increased by the greatest percentage—17.1 percent. These data suggest that the CARD Act increased the number of credit card transactions.


The Card Act Figure 3

NOTE: CAGR, compounded annual rate of growth. SOURCE: Federal Reserve System (2013, p. 41).


4.   The chart below shows interest rates (APRs) for general-purpose credit cards relative to FICO scores before and after the implementation of the CARD Act. Based on the chart, answer the following questions:


a.   Which range of FICO scores had the highest APR in 2008? In 2012?

In both 2008 and 2012, the highest APR applied to the lowest FICO scores (600-619).

b.   From 2008 to 2012, how much did the APR change for the highest FICO scores?

For the highest FICO scores, the APR from 2008 to 2012 increased by 4.2 percentage points (from 13.4 percent to 17.6 percent).

c.   What trend in APRs can be identified for all ranges of FICO scores?

After the CARD Act, APRs increased for all ranges of FICO scores.

d.   How does a FICO score affect the APR charged?

In general, the lower the FICO score, the higher the APR charged.

The Card Act Figure 4


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