TransUnion Study: Credit card popularity soars in U.S.
TransUnion’s most recent Industry Insights Report reveals significant increases in lending volumes and borrowing activity in the U.S. credit card marketplace.
The Q2 2016 Industry Insights Report found that 10 million new U.S. consumers entered the credit card marketplace from July 2015 through June 2016, the period covered by the study.
In addition, the report found that the number of Americans with a balance on at least one credit card rose to $133 million during that period and that total outstanding credit card balances rose to $662 billion in the second quarter of 2016, up six percent from Q2 2015.
Additional credit card-related findings from the study include:
card balance growth has been driven primarily by originations – both
from existing customers and new entrants opening their first credit
card. Younger millennials (consumers ages 20-29) comprised 52 percent of
those opening their first credit card during Q2 2016.
- Consumers in different credit-risk tiers have affected the increase in balances in different ways:
- In the last year, non-prime consumers (defined in the study as those with VantageScore®
3.0 scores of 660 or below) increased their balances the most, while
those in the prime-and-above risk tiers (those with VantageScore® 3.0 scores greater than 660) were more proactive in reducing their credit card balances.
- Prime-and-above consumers made up 83 percent of consumers whose balances declined in the last year. Conversely, they represented 71 percent of consumers who increased their balances in the last year.
- In the last year, non-prime consumers (defined in the study as those with VantageScore® 3.0 scores of 660 or below) increased their balances the most, while those in the prime-and-above risk tiers (those with VantageScore® 3.0 scores greater than 660) were more proactive in reducing their credit card balances.
- The serious delinquency rate per borrower (90+ days delinquent) stands at 1.29 percent as of Q2 2016, up from a reading of 1.20 percent in Q2 2015.
“While delinquency has increased, we believe it is in line with the increased share of non-prime originations over the past year. As well, delinquency rates remain low relative to historical norms,” said Paul Siegfried, senior vice president and credit card business leader for TransUnion.
For the complete study, which also includes analysis of the auto loan and mortgage markets, see TransUnion’s press release here.