Consumers are getting lots of credit cards from Wall Street -- here's why that's great news for markets and the economy

Consumers are being given more credit by big banks, and they're putting it to use.REUTERS/Mark BlinchConsumers are being given more credit by big banks, and they’re putting it to use.

One of the biggest takeaways from the first few days of bank earnings reports is their apparent eagerness to let consumers take on more debt.

That could be big news for stocks and for the economy.

Bank of America said it issued 1.3 million credit cards in its earnings report Wednesday, marking the highest tally since the third quarter of 2008.

Wells Fargo’s earnings Tuesday reported a rise in transactions and in accounts, which is a positive sign for the retail and consumer companies that will reveal their quarterly performance next. The good news for the economy is that payment volumes are also rising, signalling consumers are able to keep up current on their bills.

JPMorgan also had good news on the consumer credit front earlier this week. When the bank reported earnings on Tuesday it revealed more than $US125 billion in credit card activity for the second quarter. That tops the previous quarter for JPMorgan as well as the second quarter of 2014.

Even Goldman Sachs is jumping into consumer lending — but don’t expect any big progress for this developing line of business in its earnings report Thursday.

The market is showing optimism for other banks’ consumer businesses based on how the week began. Citigroup stock is up more than three per cent so far this week and the bank will announce results Thursday morning.

But big banks are generally viewed as forward-looking indicators for the rest of the market. As long as consumers can keep paying down debts, it’s also a good sign for the US economy.

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