Chart 54 Credit Cards Have Become Loan Product of Adverse Selection

Year Credit Card (dollars in billions) Percent Change Home Equity (dollars in billions) Percent Change
1995 443.491 21% 84.7 5%
1996 499.624 13% 91 7%
1997 536.72 7% 105.4 16%
1998 576.468 7% 103.7 -2%
1999 604.468 5% 100.4 -3%
2000 678.9 12% 131 30%
2001 713.328 5% 155.5 19%
2002 732.665 3% 213.9 38%
2003 752.792 3% 285 33%
2004 781.056 4% 401.5 41%
Oct. 2005 798.9 2% 438.2 9%

Notes: The 80/20 Rule: 80% of losses come from 20% of customers, those customers who don't own homes. Revolving Home Equity data from H.8 Assets and Liabilities of Commercial Banks in the U.S. Credit card data from G.19 Seasonally Adjusted Consumer Credit.
Sources: Federal Reserve and CIBC World Markets.