Chicago,
20
May
2015
|
12:00 PM
America/Chicago

TransUnion: Credit Card Debt and Delinquency Rate Remain Steady As 15 Million More Accounts Opened in Last Year

The latest TransUnion Industry Insights Report found that the credit card delinquency rate (the ratio of borrowers 90 days or more delinquent on their general purpose credit cards) remained steady at 1.37% in Q1 2015, unchanged year over year. Average credit card balance per borrower declined from $5,168 in Q1 2014 to $5,142 in Q1 2015.

Both credit card debt and delinquencies dropped on a quarterly basis. Credit card debt was down from $5,327 in Q4 2014 while the delinquency rate came down from 1.47% in Q4 2014, reflecting seasonality associated with improved payment patterns after the holidays.

The data provided are gathered from TransUnion's proprietary Industry Insights Report, a quarterly overview summarizing data, trends and perspectives on the U.S. consumer lending industry. The report is based on anonymized credit data from virtually every credit-active consumer in the United States.

Nidhi Verma, director of research and consulting in TransUnion’s financial services business unit
We generally see a decline in balances in the first quarter as consumers pay down balances following the holiday season. However, the credit card market continued its momentum on balance growth, which began in Q2 of last year, with 4.6% year-over-year growth in the first quarter of 2015. The seasonal quarterly decrease of 3.9% in Q1 2015 was lower than the average of 5% observed in the past five years.
Nidhi Verma, director of research and consulting in TransUnion’s financial services business unit

TransUnion reported 359.64 million credit card accounts as of Q1 2015, up from 344.53 million in Q1 2014. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased to 14.41 million in Q4 2014, up 7.1% from 13.46 million in Q4 2013.

TransUnion’s latest card report also found that the subprime risk tier (those with a VantageScore® 3.0 credit score lower than 601) represents a larger portion of all new credit card originations. In Q4 2014, the population represented 16.5% of originations for the quarter, a 26.7% year-over-year increase from 13% in Q4 2013. Overall, non-prime originations now make-up 35.6% versus 30.6% of total originations in the credit card market. However, the average balance per consumer for non-prime tiers continues to shrink year over year, as it has since 2010, with a year-over-year reduction of 5% in subprime and 2% in near prime (those with a VantageScore® 3.0 credit score between 601 and 660).

Despite significant growth in non-prime originations observed in the past year—that is, both subprime and near prime together—total credit lines within the non-prime tiers remain at 9.2% in Q1 2015, consistent with Q1 2014. This is the result of continuous shrinkage of average credit lines within this group of consumers.

“As the number of credit card accounts continues to rise, we’re seeing the non-prime population take a larger share of new credit card originations – showing an increase of 5.1 points since last year,” said Verma. “While increased non-prime originations indicate lenders may be loosening standards for providing credit to this population, the decreased average credit lines point to functioning risk management strategies. The fact that non-prime balances have remained around 35% of the overall credit card balance in the U.S. since 2012 is an indication of appropriate risk controls.”

The number of consumers under the age of 30 with a balance increased 7% in Q1 2015. The delinquency rate for this younger population also remained above the national average, ending Q1 2015 at 2.03%.

90+ Day Credit Card Delinquency Rates for Various Age Groups

Age Range

Q1 2014

Q1 2015

Pct. Change

Under 30

1.92%

2.03%

6.0%

30-39

1.93%

1.94%

0.6%

40-49

1.78%

1.73%

(2.7%)

50-59

1.26%

1.20%

(4.8%)

60+

0.72%

0.70%

(3.6%)

The delinquency rates in the majority of the nation’s largest metropolitan areas continued to decline, with only three cities experiencing an increase in delinquency rates on a year-over-year basis. Atlanta experienced the largest increase (+2.7%), followed by Philadelphia (+0.2%) and Houston (+0.1%). “The continued decline in the largest cities across the U.S. is an encouraging sign and points to a healthy credit market,” added Verma.

In Q1 2015, 19 states and the District of Columbia experienced increases in their yearly delinquency rates, with Mississippi (+8.7%), North Dakota (+5.3%) and Arkansas (+4.9%) experiencing the largest increases. Alaska (-10.4%), Washington (-5.6%) and Utah (-4.7%) saw the largest year-over-year declines.

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

Q1 2015 Credit Card Statistics – Consumer-Level Delinquency Rates

Quarter over Quarter Q4 2014 Q1 2015 Pct. Change
USA 1.47% 1.37% (6.8%)
Year over Year Q1 2014 Q1 2015 Pct. Change
USA 1.37% 1.37% 0.0%
Credit Card Consumer Delinquency Rates for Select States Q1 2015
California 1.30%
Florida 1.64%
Illinois 1.21%
New York 1.45%
Texas 1.55%
Largest Year-over-Year Declines Q1 2014 Q1 2015 Pct. Change
Alaska 1.22% 1.09% (10.4%)
Washington 1.00% 0.94% (5.6%)
Utah 0.99% 0.95% (4.7%)
Largest Year-over-Year Increases Q1 2014 Q1 2015 Pct. Change
Mississippi 1.97% 2.14% 8.7%
North Dakota 0.74% 0.78% 5.3%
Arkansas 1.69% 1.78% 4.9%

 

Q1 2015 Credit Card Statistics – Credit Card Debt per Borrower

Quarter over Quarter Q4 2014 Q1 2015 Pct. Change
USA $5,327 $5,142 (3.5%)
Year over Year Q1 2014 Q1 2015 Pct. Change
USA $5,168 $5,142 (0.05%)
Credit Card Debt per Borrower for Select States Q1 2015
California $5,196
Florida $5,136
Illinois $5,162
New York $5,340
Texas $5,360
Largest Year-over-Year Declines Q1 2014 Q1 2015 Pct. Change
Colorado $5,552 $5,451 (1.8%)
Georgia $5,514 $5,442 (1.3%)
Texas $5,418 $5,360 (1.1%)
Largest Year-over-Year Increases Q1 2014 Q1 2015 Pct. Change
South Dakota $4,458 $4,499 0.9%
Hawaii $5,468 $5,516 0.9%
Virginia $5,829 $5,866 0.6%

 

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