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TransUnion: Credit Card Balances Growing Amid Stable Delinquency Rates

CHICAGO, IL--(Marketwired - Nov 20, 2014) - The latest TransUnion Industry Insights Report found that total outstanding credit card balances increased by 4.3% in Q3 2014 from Q3 2013. This signals the second consecutive quarter of significant annual growth and it constitutes the highest growth rate observed since Q4 2008.

Interestingly, this increase in total balances occurred while the average credit card debt per borrower remained unchanged, increasing slightly from $5,239 in Q3 2013 to $5,249 in Q3 2014.

The combination of these findings indicates that the current momentum in total balances may be driven by new entrants to the credit card market. In fact, the number of consumers with access to a credit card increased by almost 6 million from Q3 2013 to Q3 2014, to nearly 156 million.

At the same time, the national credit card delinquency rate (the ratio of borrowers 90 days or more delinquent on their general purpose credit cards) remained relatively steady in the last year, declining from 1.36% in Q3 2013 to 1.34% in Q3 2014. The TransUnion report showed a quarterly increase in both the credit card delinquency rate and average credit card debt per consumer, which are believed to be reflective of seasonal effects.

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.

"Seeing the highest rate of growth in credit card balances in the last six years in such a low delinquency environment is an encouraging sign for the card industry," said Toni Guitart, director of research and consulting in TransUnion's financial services business unit. "The combination of a stable delinquency environment across consumer segments and significant amounts of new entrants in the card market, point to a positive momentum dynamic that has not been experienced since before the Great Recession."

90+ Day Credit Card Delinquency Rates for Various Age Groups
Age RangeQ3 2013Q3 2014PCT. Change
Under 302.03%2.06%1.3%

The outlook from some of the nation's largest metropolitan areas appears even brighter. For the most part, delinquency levels declined on a yearly basis at a greater clip than the national average. Leading the declines were Boston (-11.6%), Miami (-7.9%) and San Francisco (-7.0%). Only two major markets experienced minimal rises in their delinquency rates - Chicago (+0.6%) and New York (+0.2%).

Only 18 states experienced yearly increases in their delinquency rates led by Mississippi (9.6%) and West Virginia (8.5%). Massachusetts had the largest yearly decline (-11.6%) followed by Florida (-5.3%), California (-5.2%) and Idaho (-5.2%).

TransUnion reported 354.79 million credit card accounts as of Q3 2014, up from 333.72 million in Q3 2013. Viewed one quarter in arrears (to ensure all accounts are included in the data), new account originations increased 22.15% to 13.51 million in Q2 2014, up from 11.06 million in Q2 2013.

TransUnion's latest credit card report also found that the non-prime population (those consumers with a VantageScore® 3.0 credit score lower than 661) represents a larger portion of all new credit card loans at 36.0% in Q2 2014, up from 30.5% in the same period last year. Five years ago (Q2 2009), the non-prime population represented 26.7% of all credit card originations for that quarter. TransUnion's report also noted that the subprime population increased from 13.8% in Q2 2013 to 17.1% in Q2 2014.

"While more non-prime and subprime consumers are receiving credit cards, we have not seen a major impact on the overall delinquency rate," said Guitart. "We will continue to monitor this situation as more subprime lending in the credit card space is generally followed by an uptick in delinquency rates."

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. To subscribe to TransUnion news releases, please click here.

Q3 2014 Credit Card Statistics - Consumer-Level Delinquency Rates

 Quarter over QuarterQ2 2014Q3 2014Pct. Change
 Year over YearQ3 2013Q3 2014Pct. Change
 Credit Card Consumer Delinquency Rates for Select StatesQ3 2014
 New York1.42%
 Largest Year-over-Year DeclinesQ3 2013Q3 2014Pct. Change
 Largest Year-over-Year IncreasesQ3 2013Q3 2014Pct. Change
 West Virginia1.45%1.57%8.5%

Q3 2014 Credit Card Statistics - Credit Card Debt Per Borrower

 Quarter over QuarterQ2 2014Q3 2014Pct. Change
 Year over YearQ3 2013Q3 2014Pct. Change
 Credit Card Debt per Borrower for Select StatesQ3 2014
 New York$5,445
 Largest Year-over-Year DeclinesQ3 2013Q3 2014Pct. Change
 Largest Year-over-Year IncreasesQ3 2013Q3 2014Pct. Change
 North Dakota$4,258$4,3301.7%
 West Virginia$4,617$4,6891.6%

About TransUnion
As a global leader in credit and information 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 comprehensive data and advanced analytics and decisioning. 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.