The modern day mix of credit card balances does not sound set for a profit story, with the right sort of balances heading the wrong way.
The tough secular conditions that define the journey of Australia's credit card market are leading it to a low profit setting.The craze for zero interest rate balance transfers, now for terms as long as 18 months, is to blame.
It's a methodical choice, for the most part, across the industry.
Mike Ebstein in the MWE Report summed up the data this way:
"The growth currently being experienced in total card balances is all occurring on non-accruing balances which are increasing at a double digit rate.
"On the other hand, balances accruing interest are continuing to contract."
Working from the RBA's monthly data, Ebstein said average annual card balances increased by A$930 million or two per cent to $51 billion over the twelve months to October 2015. This is lacklustre by any measure.
Of close interest is that this growth comprised an increase of $1.8 billion in non-accruing balances and a decline of $899 million in balances accruing interest.
Credit and charge card spend over the year increased slightly to $299 billion over the twelve months to October 2015. with $246 billion on personal credit and $53 billion on charge and commercial cards.
The average annual revolve rate hit a new low of 64.0 per cent in October 2014.
This profit realignment is "a result of the rapidly declining revolve rate," Ebstein wrote in his report.
The second force is consumer sovereignty.
"Balances accruing interest are continuing to contract," Ebstein said.
This "emanates from the extraordinary shift in the revolve rate over this period.
"From 2005 to 2012, the underlying revolve rate moved from around 71 per cent to around 73 per cent. Since 2012 it has crashed to the current 64 per cent," Ebstein said.
Even a reset in the sector's product ethos will not much repair returns.
The new ME credit card offering for example - frank, small F, a near replica of a recent Singapore success story, and sharply presented, has a rate is 9.99 per cent and the annual fee nil.
A neat offer that may require a mountain of cross sell to make a profit.