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Gen Z Drives Credit Card Industry Rebound

Q3 2021 TransUnion Credit Industry Insights Report explores latest credit trends

The credit card industry is rebounding strongly from the early impacts of the COVID-19 pandemic with Gen Z leading the way in terms of originations and bankcard balance growth. TransUnion’s (NYSE: TRU) Q3 2021 Quarterly Credit Industry Insights Report (CIIR) also found that this youngest generation of consumers are performing well on these credit products.

During the height of the pandemic in mid-2020, card issuers pulled back and tightened new card volume. Since then, credit card originations have nearly doubled – increasing from 8.6 million in Q2 2020 to a record 19.3 million in Q2 2021. The return in consumer demand was most pronounced for Gen Z as the share of originations increased to 14.2%, a jump from 13.3% last year and 9.5% just two years prior.

“Similar to previous generations, as more Gen Z consumers come of age they are actively expanding their credit products across the wallet. For most consumers, the first credit product of choice tends to be a credit card,” said Matt Komos, vice president of research and consulting at TransUnion. “As we enter this new phase of the pandemic where accommodation programs are not as prevalent and liquidity sources such as stimulus funds are drying up, it is a natural next step for consumers to reassess their current credit obligations and apply for new forms of credit – especially if access to credit was minimal in the first place.”

Gen Z Leading Growth in Share of Credit Card Originations


Q2 2021

Q2 2020

Q2 2019

Q2 2018

Gen Z

(1995 and after)















Gen X










Baby Boomer







(Prior to 1945)









Total Originations


19.3 million

8.6 million

16.4 million

15.8 million

On top of the record level of credit card originations is a return to consumer spending, particularly among the younger generations. In Q3 2021 Gen Z average balance per consumer increased 13.9% YoY – the only generation with two consecutive quarters of growth. Millennials also showed average balance growth per consumer with a 1.8% YoY increase.

As originations and balances rise for Gen Z, their serious delinquency rates continue to decline. In Q3 2021, the 90+ day borrower level delinquency rate was 1.52% for Gen Z consumers, a decline from the 2.31% (90+DPD) rate observed pre-pandemic in Q3 2019.

“As the economy continues to show signs of recovery, card issuers are ramping up for growth and bringing younger consumers into the fold,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. “Card issuers are eager to meet the rising consumer demand for Gen Z by expanding access to credit and are actively managing credit line levels at origination to control for risk. These younger generations have shown interest in growing their credit obligations through both traditional products such as credit cards as well as through forms of credit such as Buy Now, Pay Later.”

A recent TransUnion study found that while Buy Now, Pay Later (BNPL) and Point-of-Sale (POS) have emerged as popular types of financing among Gen Z and Millennial consumers, these offerings have not had a major impact on the usage of other forms of credit. In fact, BNPL / POS applicants generally use other forms of credit more so than the rest of the credit active population.

In addition to recent credit card growth, the Q3 2021 CIIR also found that the auto, mortgage and personal loan industries have demonstrated renewed signs of strength since the height of the COVID-19 pandemic. For more information about the report, please register for the Q3 2021 Quarterly Credit Industry Insights Report Webinar. Read on for more specific insights about credit cards, personal loans, auto loans and mortgages.

As Growth in Credit Card Industry Surges, Performance Remains Strong

Q3 2021 CIIR Credit Card Summary

Consumers with access to credit hit an all-time high of 194.3 million consumers in Q3 2021. A key driver for this expansion of credit was the record level of 19.3 million originations – a 17.2% YoY increase from Q2 2019 – which especially saw growth among non-prime consumers. Consumer performance has remained strong in light of this rapid growth with delinquencies declining to a low of 1.13% (90+DPD) in Q3 2021 from 1.23% over the same period last year. Following five straight quarters of declines, total outstanding balances grew 0.5% YoY to $727 billion. Balances are expected to increase as consumer spending remains high and given the expanded originations and credit lines. Total credit lines also notched an all-time high at $3.9 trillion, an increase of 3.6% YoY with growth observed in the prime and above risk segments.

Instant Analysis

“Lenders and consumers have come roaring back to the credit card market – we’ve seen a record number of originations and the rebuilding of bankcard balances with both Gen Z and Millennials playing a significant role in driving this growth. Amid this growth, delinquencies have stayed at historic lows, but with continued balance growth and the winding down of remaining hardship programs, a slow rise in delinquency is to be expected. In the next quarter, the breakneck origination growth could be impacted by the uncertainty surrounding supply chain issues, which could slow origination growth during the upcoming holiday season.”

  • Paul Siegfried, senior vice president and credit card business leader at TransUnion

Q3 2021 Credit Card Trends

Credit Card Lending Metric

Q3 2021

Q3 2020

Q3 2019

Q3 2018

Number of Credit Cards

474.2 million

451.9 million

441.9 million

427.2 million

 Borrower-Level Delinquency Rate (90+ DPD)





Average Debt Per Borrower





Prior Quarter Originations*

19.3 million

8.6 million

16.4 million

15.8 million

Average New Account Credit Lines*





*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Click here for additional credit card industry metrics.

Consumer Lending Market Rebuilds Toward Pre-Pandemic Levels

Q3 2021 CIIR Personal Loan Summary

In the thick of the pandemic, unsecured personal loan originations saw a significant dip during Q2 and Q3 2020. The most recent origination figures have once again trended toward pre-pandemic levels growing nearly 70% YoY. While the 4.4 million originations observed in Q2 2021 (viewed one quarter in arrears) still trails the 4.8 million from Q2 2019, the risk distribution of consumers is showing a return to non-prime lending. New balance growth has also helped drive total balances to $156 billion – nearly recovering to the Q1 2020 high of $159 billion, but still much higher than one year ago ($146 billion in Q3 2020).

Instant Analysis

“The personal loan market has shown a solid return to lending with originations rebuilding quarterly over the course of the pandemic. Lenders are recalibrating their growth strategies and reviving the below prime risk segments of the market. Despite this risk mix shift, account level delinquencies hit another record low of 1.52% at 90+ days past due – a significant feat considering the increase in below prime balances and decreasing forbearance programs. As the economy continues to normalize, we expect this growth trajectory in consumer lending to continue over the next quarter.”

  • Liz Pagel, senior vice president and consumer lending business leader at TransUnion

Q3 2021 Unsecured Personal Loan Trends

Personal Loan Metric

Q3 2021

Q3 2020

Q3 2019

Q3 2018

Total Balances

$156 billion

$148 billion

$152 billion

$130 billion

Number of Unsecured Personal Loans

21.6 million

21.4 million

22.5 million

20.4 million

Number of Consumers with Unsecured Personal Loans

19.2 million

19.5 million

20.2 million

18.5 million

Account-Level Delinquency Rate (90+ DPD)





 Borrower-Level Delinquency Rate (60+ DPD)





Average Debt Per Borrower





Prior Quarter Originations*

4.4 million

2.6 million

4.8 million

4.5 million

Average Balance of New Unsecured Personal Loans*





*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Click here for additional consumer lending industry metrics.

Auto Finance Market Remains Stable Despite Inventory Challenges

Q3 2021 IIR Auto Loan Summary

The auto finance market continued to show signs of strength throughout 2021 with origination growth and strong performance. Originations grew to 8.2 million in Q2 2021, a 27.4% increase over the same period last year and a 12.8% increase over Q2 2019 when the auto market was relatively healthy. Originations recovered rapidly in 2021 with growth observed across all risk tiers and the risk distribution starting to more closely resemble pre-pandemic levels. However, YoY subprime origination growth still lags behind other risk tiers due to issues such as affordability and employment challenges. In terms of delinquency, the 60+DPD rate has also shown a material improvement and reached 1.38%. However, as accounts roll off of hardship programs a slight uptick in delinquency is to be expected.

Instant Analysis

“So far in 2021 we have seen growth in the auto industry across both originations and balances and at the same time, serious delinquency rates have declined. While origination growth rebounded to a healthy level this past quarter, external factors such as the uncertainty surrounding semiconductor chip shortages and supply chain issues will continue to have an impact on new vehicle inventory and drive up vehicle prices. We anticipate this will impact vehicle sales through the remainder of the year and possibly into 2022 despite growing consumer demand.”

  • Satyan Merchant, senior vice president and automotive business leader at TransUnion

Q3 2021 Auto Loan Trends

Auto Lending Metric

Q3 2021

Q3 2020

Q3 2019

Q3 2018

Number of Auto Loans

83.1 million

83.7 million

83.4 million

81.9 million

 Borrower-Level Delinquency Rate (60+ DPD)





Prior Quarter Originations*

8.2 million

6.5 million

7.3 million

7.3 million

Average Monthly Payment**





Average Balance

of New Auto Loans*





Average Debt Per Borrower





*Note: Originations are viewed one quarter in arrears to account for reporting lag.

**Data from IHSM Catalyst

Click here for additional auto industry metrics.

New Home Purchases Outpace Refinancing as Origination Growth Slows

Q3 2021 CIIR Mortgage Loan Summary

For the first time since the start of the pandemic, new home purchases accounted for the bulk of origination volume, growing from 43% share in Q2 2020 to 53% share in Q2 2021 and outpacing refinances. This reversal was driven by slowed refinance demand, especially with Rate and Term refinancing which decreased 23% YoY. Overall, mortgage originations are continuing to grow – albeit at a slower rate than previous quarters – with a 7% YoY increase in volume during Q2 2021, down significantly from the 76% YoY growth we saw in the same period last year. Among origination loan types, FHA and Jumbo loans grew at the fastest rate (+16% and +37%, respectively). Total mortgage balances grew 8% YoY to a high of $10.5 trillion in Q3 2021 while the average new loan amount increased 4% YoY to over $305,000 – the result of low inventory, high consumer demand and rising home prices.

Instant Analysis

“Following several quarters of hyper growth, activity in the mortgage market has started to slow. We expect the trend of home purchases to continue to overtake refinance, especially if consumer demand for homes stays strong and inventory improves. This is assuming mortgage rates continue to rise, which will cause refinances to decline. At a generational level, origination growth was most pronounced for Gen Z consumers and we expect this to continue as that generation ages and they look to enter the housing market and become home buyers for the first time.”

  • Joe Mellman, senior vice president and mortgage business leader at TransUnion

Q3 2021 Mortgage Trends

Mortgage Lending Metric

Q3 2021

Q3 2020

Q3 2019

Q3 2018

Number of Mortgage Loans

51.2 million

50.7 million

50.3 million

49.8 million

Account-Level Delinquency Rate (90+ DPD)





Prior Quarter Originations*

3.5 million

3.3 million

1.9 million

1.7 million

Mortgage Origination* Distribution – Purchase





Mortgage Origination* Distribution –










Average Balance

of New Mortgage Loans*









* Originations are viewed one quarter in arrears to account for reporting lag.

Click here for additional mortgage industry metrics.

For more information about the report, please register for the TransUnion Q3 2021 CIIR Webinar. 

About TransUnion (NYSE: TRU)

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