A recent commentary by financial expert Erica Sandberg underscores the pivotal role of credit cards in sustaining economic stability and fostering growth across households and small enterprises. Published via the Consumer Bankers Association, the piece argues that the existing credit system—despite facing regulatory scrutiny—is functioning effectively and delivering broad societal benefits.\n\nSandberg highlights that credit cards are more than just payment tools; they serve as vital instruments for financial resilience, particularly during economic disruptions. During the 2020 pandemic, access to credit helped maintain consumer spending, contributing significantly to the nation’s recovery. Data from October 2025 shows that credit card expenditures accounted for 22.4% of gross domestic product and represented 33% of personal consumption expenditures—a six-percentage-point increase since 2015—reflecting their growing importance amid inflationary pressures.\n\nIn the fourth quarter of 2024, consumer spending rose by 4.2%, with durable goods purchases jumping 12%, the largest quarterly increase since early 2023. This momentum was partly fueled by the liquidity credit cards provide, enabling households to manage expenses even when income fluctuates.\n\nContrary to narratives that frame credit card providers as exploitative, Sandberg emphasizes mutual benefit: responsible borrowing paired with sound lending practices creates a stable financial ecosystem. She notes that in the first quarter of 2025, delinquency rates for accounts overdue by 30 days or more declined across both balances and active accounts, even as borrowing costs rose—indicating stronger financial management among users.\n\nFor families, credit cards offer a pathway to building credit history, managing emergencies, and accessing rewards such as cash back, travel perks, or points. These incentives not only encourage card usage but also stimulate secondary spending in sectors like retail, hospitality, and transportation. Billions of dollars in annual rewards flow back into the economy, amplifying demand and supporting job creation.\n\nThe commentary also points to the role of credit in small business vitality. Transaction volume grew from 31 billion worth $2.8 trillion in 2015 to 55.3 billion worth $5.42 trillion in 2022—an increase of over 75% in volume and 90% in value. This expansion reflects rising consumer confidence and spending power, directly benefiting local enterprises.\n\nHowever, Sandberg warns against proposed legislative measures that could impose price controls or arbitrary lending restrictions. Such interventions, she argues, would undermine credit availability, reduce consumer spending, and ultimately slow economic growth. The consequences would fall hardest on the very groups these policies aim to protect—low- and middle-income households and small business owners.\n\nPersonal consumption expenditures made up 67.7% of GDP in early 2025, reinforcing the centrality of consumer activity to national economic health. Sandberg concludes that the credit card system is not broken but functioning as intended—supporting financial security, driving innovation in payments, and enabling economic continuity.\n— news from consumerbankers.com\n\n— News Original —\nICYMI: Why Smart Lending and Responsible Borrowing Keep the Economy Running\nA new op-ed from consumer finance expert Erica Sandberg highlights how the competitive credit card market benefits consumers and the economy as a whole. There are, however, a number of misguided pieces of legislation on Capitol Hill that would impose government price controls on this highly valued financial tool that millions of Americans use each and every day. n nAs Sandberg says in the op-ed: n n”The credit card industry is delivering real results. It supports household financial security, drives GDP growth, and powers small business success. Yet policymakers continue to consider increasingly restrictive regulations that could undermine all of this. n n”Heavy-handed policies that limit credit availability, impose arbitrary restrictions, or make qualification unreasonably difficult won’t just hurt card issuers — they’ll hurt the very consumers and small businesses these policies claim to protect. n n”Consumers will lose access to essential credit. Small businesses will face reduced consumer spending. Economic growth will slow. n n”The data is clear: When credit cards work as intended, everyone benefits. The system isn’t broken. It’s working.” n nTo read the full op-ed, click HERE or keep reading below. n nOpinion: Why Smart Lending and Responsible Borrowing Keep the Economy Running n nBy Erica Sandberg n nCardRates.com n nOct. 28, 2025 n nFor as long as I can remember, credit card issuers have faced criticism regarding lending practices and credit availability. I started in this business way back in the mid-1990s as a credit counselor for a nonprofit organization. Pointing fingers at these products and their issuers for a variety of financial ills was commonplace. n nBlaming big business for perceived — and sometimes real — problems is easy, but there is always another side. Credit cards can be instrumental in building financial well-being, and not just for the account holder but for the economy at large. n nDespite this, questions about qualification standards and credit limit management persist in public and political discourse. The narrative remains familiar: greedy lenders enabling reckless borrowers. n nHowever, consumer responsibility matters. Smart lending practices matter. Together, these two factors have created something genuinely powerful: a system that kept America functioning when the world stopped, and that continues to fuel economic growth today. n nSo I’m here now to give credit where credit is due. Here’s why. n nCredit Cards are Economic Stabilizers n nDuring the 2020 pandemic disruption, credit card availability proved instrumental in maintaining consumer purchasing power and economic continuity. n nAccording to an October 2025 Consumer Bankers Association report, credit cards were instrumental in America’s speedy economic recovery during and after the COVID-19 pandemic. n nIn fact, credit card spending accounts for 22.4% of gross domestic product. This share has been increasing over the years, with credit card spending totaling $5.83 trillion and representing 33% of personal consumption expenditures. n nCredit card spending as a share of personal consumption expenditures and GDP grew by roughly six percentage points from 2015 to 2022 as consumers used the liquidity provided by credit cards to make ends meet during a period of high inflation. n nConsumer spending was a key contributor to GDP growth, rising 4.2% in Q4 2024, with spending on durable goods up 12%, the biggest quarterly jump since early 2023. n nRecent data also indicates meaningful shifts in credit card usage patterns since the pandemic. The share of active credit card accounts making just the minimum payment fell in the first quarter of 2025 after a year of consecutive quarter-over-quarter increases. n nEven with higher credit costs, credit card performance strengthened in the first quarter of 2025, with delinquencies of 30-or-more days falling across both accounts and balances. n nIn other words, good news. n nCredit Cards Help Consumers Achieve Financial Security n nCredit cards function as essential financial tools, offering households reliable access to liquidity for routine expenses, emergency situations, and credit history development. This accessibility supports economic participation and long-term wealth building across income levels. n nIn the first quarter of 2025, personal consumption expenditures represented 67.7% of the nation’s gross domestic product, the primary measure of the size of the U.S. economy. n nCredit Cards Promote Small Business Growth n nConsumer spending financed through credit cards directly drives GDP expansion and supports small business growth. Credit card transactions have grown from an estimated 31 billion transactions worth $2.8 trillion in 2015 to 55.3 billion transactions worth $5.42 trillion in 2022 — an increase of over 75% and 90%, respectively. n nCredit Cards Provide Rewards and Promotions n nCredit card rewards programs drive consumer spending and economic growth by incentivizing credit card usage. When consumers redeem cash back, travel benefits, or points, these rewards stimulate secondary spending throughout the economy. n nFamilies take vacations, businesses reduce travel costs, and lower-income households gain purchasing power. n nThis creates a cycle in which rewards encourage card adoption, increase merchant revenue, and generate additional consumer spending. Billions of dollars in annual rewards flow back into the economy, supporting retail, hospitality, and travel industries while strengthening consumer purchasing power and sustaining economic growth. n nDon ‘t Mess with Success n nThe credit card industry is delivering real results. It supports household financial security, drives GDP growth, and powers small business success. Yet policymakers continue to consider increasingly restrictive regulations that could undermine all of this. n nHeavy-handed policies that limit credit availability, impose arbitrary restrictions, or make qualification unreasonably difficult won’t just hurt card issuers — they’ll hurt the very consumers and small businesses these policies claim to protect. n nConsumers will lose access to essential credit. Small businesses will face reduced consumer spending. Economic growth will slow. n nThe data is clear: When credit cards work as intended, everyone benefits. The system isn’t broken. It’s working. n n###
