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TransUnion: Q2 Credit Card Delinquencies and Debt Remain Near Historic Lows

Delinquency Levels Not Seen Since 1994

Q2 2013 TransUnion Credit Card Infographic

CHICAGO, IL--(Marketwired - Aug 13, 2013) - The national credit card delinquency rate (the ratio of borrowers 90 or more days past due) decreased to 0.57% in Q2 2013 from 0.63% in Q2 2012. On a quarter-over-quarter basis, credit card delinquencies dropped from 0.69% in Q1 2013. The credit card delinquency rate ended the second quarter only one basis point from the all-time low of 0.56%, set in the second quarter of 1994.

Average credit card debt per borrower remained nearly unchanged over the last year, dropping from $4,971 in Q2 2012 to $4,965 in Q2 2013. On a quarterly basis, card debt increased from $4,875 in Q1 2013.

This information is reported by TransUnion and is part of its ongoing series of quarterly analyses of credit-active U.S. consumers, evaluating how they are managing credit related to mortgages, credit cards and auto loans.

"Despite recent improvements in the employment situation, consumers continue to value their credit card relationships as a primary means of liquidity. This is best demonstrated by the historically low credit card delinquency rates we observe today," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "Credit card debt also remains relatively low, and while we did observe a quarterly rise in debt, we would need to see a few more quarters of increases to describe it as a significant trend. Having said that, the data supports that consumers will continue to prioritize their credit card relationships over other credit obligations, and delinquencies should remain low into the near future."

Since 2000, the average 90-day credit card delinquency rate for the second quarter of the year has been 1.07%. In that same time period, average credit card debt in the second quarter has averaged $5,169.

Only two states -- Indiana and New Hampshire -- saw rises in their delinquency rates year over year, though the magnitudes of the increases were small.

On a more granular level, 74% of metropolitan statistical areas (MSAs) saw declines in their respective delinquency rates in Q2 2013 relative to one year ago. This is an improvement over the previous quarter, when 65% of MSAs experienced year-over-year decreases. Some of the MSAs that experienced the largest year-over-year decreases in Q2 2013 included Seattle (26.5% decline from 0.49% to 0.36%), Denver (21.4% decline from 0.56% to 0.44%) and Minneapolis (21.3% decline from 0.47% to 0.37%).

The TransUnion quarterly analysis of credit card performance also examines origination rates, which are evaluated one quarter in arrears to account for the reporting lag of new accounts. In Q1 2013, new credit card originations increased 5.6% relative to Q1 2012 (from 9,429K to 9,961K accounts). The share of non-prime, higher-risk originations (with a VantageScore® 2.0 credit score lower than 700 on a scale of 501-990) did not have a material change moving from 27.4% in Q1 2012 to 27.3% in Q1 2013. "The low delinquency rates we see are in part due to the continued conservatism among lenders in extending credit to non-prime consumers. The percent of originations going to that population is still much lower than the 45% or so that we saw prior to the recession."

Based on current economic assumptions, TransUnion forecasts credit card delinquencies to remain relatively flat in the third quarter, closing at about 0.6%. This forecast is based on seasonality effects and various other economic factors such as anticipated gross state product, consumer sentiment, disposable income, and employment conditions. The forecast changes as the economy deviates from a conservative economic outlook, if there are unanticipated shocks to the economy affecting recovery, or if lenders materially change their underwriting standards.

Q2 2013 Credit Card Statistics - Delinquency Rates

             
Quarter over Quarter   Q1 2013   Q2 2013   Pct. Change
USA   0.69%   0.57%   (17.4%)
             
Year over year   Q2 2012   Q2 2013   Pct. Change
USA   0.63%   0.57%   (9.5%)
             
Highest Credit Card Delinquency States   Q2 2013
Mississippi   0.87%
Alabama   0.77%
Arkansas   0.76%
Louisiana   0.76%
     
Lowest Credit Card Delinquency States   Q2 2013
North Dakota   0.35%
Minnesota   0.37%
Montana   0.37%
South Dakota   0.38%
     
Top 3 Year-over-Year Increases   Q2 2012   Q2 2013   Pct. Change
New Hampshire   0.53%   0.58%   9.4%
Indiana   0.65%   0.66%   1.5%
             

*Only two states experienced increases.

             
Top 3 Year-over-Year Declines   Q2 2012   Q2 2013   Pct. Change
Oregon   0.59%   0.49%   (23.7%)
Nevada   0.89%   0.86%   (21.3%)
Colorado   0.57%   0.52%   (21.1%)
             

Q2 2013 Credit Card Statistics - Credit Card Debt Per Borrower

             
Quarter-over-Quarter   Q1 2013   Q2 2013   Pct. Change
USA   $4,875   $4,965   1.8%
             
Year-over-Year   Q2 2012   Q2 2013   Pct. Change
USA   $4,971   $4,965   (0.1%)
     
Highest Credit Card Debt States   Q2 2013
Alaska   $6,910
Colorado   $5,625
Connecticut   $5,617
North Carolina   $5,548
     
Lowest Credit Card Debt States   Q2 2013
Iowa   $3,885
North Dakota   $4,011
South Dakota   $4,236
Nebraska   $4,298
     
Top 3 Year-over-Year Increases   Q2 2012   Q2 2013   Pct. Change
Rhode Island   $4,949   $5,102   3.1%
Louisiana   $4,642   $4,773   2.8%
Oklahoma   $4,746   $4,854   2.3%
             
Top 3 Year-over-Year Declines   Q2 2012   Q2 2013   Pct. Change
Oregon   $4,912   $4,773   (2.8%)
Nevada   $4,978   $4,851   (2.5%)
Idaho   $4,639   $4,549   (1.9%)
             
             

Supporting Resources/Links
TransUnion Trend Data Interactive U.S. Map
TransUnion 1Q13 Credit Card Statistics
TransUnion Credit Monitoring Study
TransUnion Payment Hierarchy Study
TransUnion Deleveraging Analysis
TransUnion on Twitter

TransUnion's Trend Data database
TransUnion's Trend Data is a one-of-a-kind database consisting of 27 million anonymous consumer records randomly sampled every quarter from TransUnion's national consumer credit database. Each record contains more than 200 credit variables that illustrate consumer credit usage and performance. Since 1992, TransUnion has been aggregating this information at the county, Metropolitan Statistical Area (MSA), state and national levels. For the purpose of this analysis, the term "credit card" refers to those issued by banks.

About TransUnion
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 33 countries around the world on five continents. www.transunion.com/business

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