Credit Card Use Still Rising

Credit Card Use Still Rising

As the effects of Donald Trump’s trade policies ripple through the economy, their full impact—especially from the recent “Liberation Day” tariffs—hasn’t yet appeared in the quarterly earnings of major U.S. banks, where consumer spending trends usually surface first.

Despite market volatility, credit card companies are reporting strong performance. Consumers continue to borrow, spend, and open new credit cards at higher levels than last year. Citigroup CFO Mark Mason noted that while consumer resilience remains, spending habits have shifted toward essentials and away from travel and entertainment.

JPMorgan Chase saw a 7% rise in card spending, although balances are growing. Bank of America also reported a 4% increase in card spending, along with a drop in late payments. Still, concerns about a possible recession are prompting banks to prepare for potential losses.

JPMorgan raised its credit loss allowance by $973 million, totaling $27.6 billion in reserves, and increased its loan loss provisions to $3.3 billion—a 73% jump year-over-year. The bank holds $1.5 trillion in liquid assets. Similarly, Citi raised its credit costs by over 15%, with reserves growing by $1 billion in Q1 to $22.8 billion. It also maintains $960 billion in liquidity as a safeguard against economic uncertainty.

Revolut Hits $1 Billion Profit

Revolut has reached a major milestone, posting over $1 billion in annual profit for the first time. The British fintech firm, which offers financial services through its app, reported a £1.1 billion ($1.5 billion) net profit for 2024, a 149% increase from the previous year. Revenues also rose 72% to £3.1 billion, fueled by growth in multiple business areas.

Its wealth division, including stock trading, grew rapidly with a 298% surge in revenue to £506 million. Subscription revenue also climbed 74% to £423 million. The company’s loan book expanded by 86% to £979 million, while customer deposits pushed interest income up 58% to £790 million.

This financial success comes as Revolut prepares to become a full-service bank in the U.K. After securing a restricted banking license from the Prudential Regulation Authority in July 2024, it’s now in the “mobilization” phase — building infrastructure ahead of a full rollout.

U.K. CEO Francesca Carlesi says the firm’s main goal is to become the primary bank for U.K. users and expand globally through a future IPO. However, it faces stiff competition from Monzo and Starling, which gained full banking licenses years earlier. Revolut’s full launch is expected within the next year.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.