Where Have All the Credit Cards Gone?

In most years, about 30% of all credit cards are in the penalty box, stashed away by consumers who are trying to get their spending under control. But these aren’t normal times. Right now, fully half of Citicorp’s 30 million Visa and MasterCards are dormant. To chairman John Reed, that’s worrisome. As the % largest issuer of such cards, Citicorp relies on the profit from those operations (last year: $610 million) to offset disasters like the depression in commercial real estate. As Americans get serious about whittling down their debts, the profit cushion for many bankers is getting uncomfortably thin.