Findings from the newly released Q1 2024 Quarterly Credit Industry
Insights Report (CIIR) from TransUnion (NYSE: TRU) reveal that the
consumer credit market continues to show resiliency in the face of
a challenging economic environment, as consumers continue to turn
to credit to help manage the higher costs they are facing.
Despite interest rates that remain persistently high relative to
recent history, certain key credit card metrics have seen steady
growth in recent years, including total number of bankcards,
average new bankcard account credit lines, and the total number of
U.S. consumers who carry a bankcard balance.
- As of Q1 2024, consumers hold more than 543 million bankcards
in their wallets, a growth of 20 million year-over-year (YoY) and
more than 88 million from just three years ago.
- And more consumers are using their available credit line, as
the number of consumers who carry a bankcard balance has seen
steady growth as well, up 2.2% YoY.
- Average new account credit lines saw YoY growth, up 3.8% to
$5,628, in part due to a greater proportion of originations among
super prime, for whom new account credit lines tend to be
higher.
While average new account credit lines saw YoY growth, it is
worth noting that total new account credit lines were down 2.6% due
to a tightening origination environment.
Consumers have also increasingly turned to unsecured personal
loans. Total unsecured personal loan balances have grown 9% YoY to
$245 billion in Q1 2024. Unsecured personal loans have also seen
growth in the total number of consumers who hold at least one
unsecured personal loan, showing an increase of 5% YoY, and 24%
since Q1 2021.
“Consumers’ access to credit has grown significantly in recent
years and will provide them with credit to tap into when needed,”
said Michele Raneri, vice president and head of U.S. research and
consulting at TransUnion. “Many of these consumers are choosing to
take advantage of these products that can help them manage their
rising monthly household expenses, despite the fact that these
products may bring with them interest rates that are higher
relative to recent history. For these consumers, the short-term
pressure of inflation poses a more pressing problem to solve than
the potential impact of higher interest rate credit, which includes
higher monthly debt service payments.”
Bankcards and Unsecured Personal Loans Continue to See
Growth Despite Higher Interest Rates |
|
Q1 2024 |
Q1 2023 |
Q1 2022 |
Q1 2021 |
Number of Credit Cards (Bankcards) |
543.1 million |
523.2 million |
490.0 million |
455.5 million |
Number of Consumers Carrying a Bankcard
Balance |
169.0 million |
165.3 million |
158.9 million |
150.1 million |
Average New Bankcard Account Credit Lines* |
$5,628 |
$5,421 |
$4,634 |
$3,811 |
Total Unsecured Personal Loan Balances |
$245 billion |
$225 billion |
$178 billion |
$144 billion |
Number of Consumers with Unsecured Personal
Loans |
23.5 million |
22.4 million |
20.4 million |
19.0 million |
*Note: Originations are viewed one quarter in arrears to account
for reporting lag.
Delinquencies continue to rise across a number of credit
products, with increases seen in credit cards, mortgages, and auto.
However, a decrease was seen in unsecured personal loans, largely
driven by a shift to lower-risk borrowers, with a year-over-year
(YoY) decline in borrower-level delinquency 60 days or more past
due (60+ DPD). While last quarter saw delinquencies increase, it is
worth noting that we have seen a slowing in the rise in credit card
delinquency along with a decline in unsecured personal loan
delinquency.
“We have seen delinquencies tick up in recent quarters, which is
certainly something lenders need to follow closely. At the same
time, the consumer credit market remains resilient given the
compounding of relatively high interest rates and persistent
inflation,” said Raneri. “The prevailing hope is that as long as
unemployment figures remain relatively low, serious delinquency
rates may stabilize.”
To learn more about the latest consumer credit trends, register
for the Q1 2024 Quarterly Credit Industry Insights Report
webinar. Read on for more specific insights about credit cards,
personal loans, auto loans and mortgages.
Super prime drives bankcard originations amidst declines
overall
Q1 2024 CIIR Credit Card Summary
Bankcard originations were down 6.3% YoY in Q4 2023. This
represents two consecutive years of a fourth-quarter YoY decline in
originations. At 19.3 million, the origination volume remains 2.3%
above 2019 levels, led by super prime, which saw its highest
origination volume quarter since 2005. All other risk tiers saw a
YoY decline in originations. Total balances increased by 11.3% YoY
and remained above $1 trillion for the second consecutive quarter.
The prime and below risk segments have held the majority of
balances for the past three quarters. Average debt per borrower
increased by 8.5% YoY to $6,218. Borrower-level 90+ DPD increased
by 29bps YoY to 2.55%, while vintage performance has seen
deterioration across all risk tiers.
Instant Analysis
“As consumers manage expenses amidst stubbornly high inflation,
demand for credit continues to be strong despite the currently
relatively high interest rates. Evidence for this can be seen in
the significant bankcard balance growth we are seeing across risk
tiers. Delinquencies have increased, however, the growth trend has
slowed. Nevertheless, they continue to be worth careful monitoring
moving forward. ”
- Paul Siegfried, senior vice president
and credit card business leader at TransUnion
Q1 2024 Credit Card Trends |
Credit Card Lending Metric (Bankcard) |
Q1 2024 |
Q1 2023 |
Q1 2022 |
Q1 2021 |
Number of Credit Cards (Bankcards) |
543.1 million |
23.2 million |
490.0 million |
455.5 million |
Borrower-Level Delinquency Rate (90+ DPD) |
2.55% |
2.26% |
1.62% |
1.28% |
Total Credit Card Balances |
$1.02 Trillion |
$917 billion |
$768 billion |
$688 billion |
Average Debt Per Borrower |
$6,218 |
$5,733 |
$5,026 |
$4,795 |
Number of Consumers Carrying a Balance |
169.0 million |
165.3 million |
158.9 million |
150.1 million |
Prior Quarter Originations* |
19.3 million |
20.6 million |
21.2 million |
15.0 million |
Average New Account Credit Lines* |
$5,628 |
$5,421 |
$4,634 |
$3,811 |
*Note: Originations are viewed one quarter in arrears to account
for reporting lag.For more credit card industry information, click
here for episodes of Extra Credit: A Card and Banking Podcast by
TransUnion. Click here for a Q1 2024 credit card infographic.
Total unsecured personal loan balances tick up while
subprime delinquencies decline
Q1 2024 CIIR Unsecured Personal Loan
Summary
Total unsecured personal loan balances grew 9% YoY in Q1 2024.
Balance growth was led by super prime, the only tier with
double-digit growth. The average account balance increased by
nearly 5% YoY to $8,737. Average balance growth was led by
subprime, followed by super prime. Balance per consumer also grew
by nearly 5% YoY to $11,829. Unsecured personal loan originations
were down, at 5 million for Q4 2023. Contraction in originations
was seen across all risk tiers with the exception of super prime.
Super prime originations grew by 12.6% YoY. Borrower-level 60+ DPD
delinquencies fell YoY in Q1 2024, down to 3.75%; however, only
subprime declined while all other risk tiers saw increases YoY. On
a vintage basis, the delinquency rate for Q1 2023 originations
through January 2024 is much lower than for originations for Q1
2022 originations over the same performance period but remains
elevated over Q1 2021 originations.
Instant Analysis
“Total balance growth has slowed slightly after three years,
with the YoY increase of 9% representing the first quarter since Q4
2021 that saw only a single digit increase in total balances.
Unsecured personal loan originations were down slightly YoY as
lenders are maintaining tight underwriting standards, focusing on
lower risk borrowers. These tighter underwriting standards in
recent quarters likely played a role in the YoY decline in overall
delinquencies. The originations decline was most pronounced in the
subprime segment, which fell nearly 5% YoY.”
- Liz Pagel, senior vice president of consumer lending
at TransUnion
Q1 2024 Unsecured Personal Loan Trends |
Personal Loan Metric |
Q1 2024 |
Q1 2023 |
Q1 2022 |
Q1 2021 |
Total Balances |
$245 billion |
$225 billion |
$178 billion |
$144 billion |
Number of Unsecured Personal Loans |
28.1 million |
26.9 million |
23.4 million |
20.9 million |
Number of Consumers with Unsecured Personal
Loans |
23.5 million |
22.4 million |
20.4 million |
19.0 million |
Borrower-Level Delinquency Rate (60+ DPD) |
3.75% |
3.91% |
3.25% |
2.68% |
Average Debt Per Borrower |
$11,829 |
$11,281 |
$9,896 |
$8,817 |
Average Account Balance |
$8,737 |
$8,356 |
$7,448 |
$6,897 |
Prior Quarter Originations* |
5.0 million |
5.2 million |
5.7 million |
4.2 million |
*Note: Originations are viewed one quarter in arrears to account
for reporting lag.Click here for additional unsecured personal loan
industry metrics. Click here for a Q1 2024 unsecured personal loan
infographic.
Purchase share of mortgage originations hits a record as
interest rates remain high
Q1 2024 CIIR Mortgage Loan Summary
Q4 2023 origination volumes were down 11% YoY, with originations
continuing to be driven by purchase originations. Mortgage rates
set more than a two-decade high during Q4 2023. While overall
volumes were down YoY, FHA mortgage originations were up 9% YoY in
Q4 2023, the first loan type to register a YoY increase in two
years. Delinquencies continue to trend up and are worth continuing
to monitor. 60+ DPD consumer-level delinquencies were up to 1.14%
in Q1 2024; however, delinquencies still remain below pre-pandemic
rates. The 2022 resurgence in home equity lending slowed somewhat
in Q4 2023, with HELOCs down 17% and HELOANs down 4% YoY. GenX and
Baby Boomers have the highest share of HELOC originations at 39%
and 30%, respectively, in Q4 2023. These same generational groups
lead the way with 35% and 30% of HELOANs, respectively, during the
quarter.
Instant Analysis
“Stubbornly high interest rates continue to suppress the
mortgage market, keeping many would-be home-buyers on the sidelines
until rates begin dropping. There remains hope that rates will
decline over the course of 2024; however, that may happen later
than previously anticipated in light of the most recent inflation
report. While originations remain down YoY, the rates of decline
continue to decelerate, which may be a sign that some consumers are
simply tired of waiting. Rising delinquencies are worth paying
attention to, though they continue to remain below pre-pandemic
levels.”
- Satyan Merchant, senior vice president, automotive and
mortgage business leader at TransUnion
Mortgage Lending Metric |
Q1 2024 |
Q1 2023 |
Q1 2022 |
Q1 2021 |
Number of Mortgage Loans |
53.2 million |
52.9 million |
51.5 million |
50.8 million |
Consumer-Level Delinquency Rate (60+ DPD) |
1.14% |
0.90% |
0.80% |
0.89% |
Prior Quarter Originations* |
931,661 |
1.0 million |
2.9 million |
4.0 million |
Average Loan Amountsof New Mortgage
Loans* |
$327,102 |
$327,050 |
$315,661 |
$293,901 |
Average Balance per Consumer |
$260,745 |
$253,514 |
$241,203 |
$224,717 |
Total Balances of All Mortgage Loans |
$12.1 trillion |
$11.8 trillion |
$11.0 trillion |
$10.0 trillion |
* Originations are viewed one quarter in arrears to account
for reporting lag.Click here for additional mortgage industry
metrics. Click here for a Q1 2024 mortgage industry
infographic.
Average Auto Monthly Payments Stabilize as Challenges
Around Affordability Remain
Q1 2024 CIIR Auto Loan Summary
Q4 2023 saw 5.8 million originations, which is in line with the
total one year ago. Originations remain down as compared to 2019
across all risk tiers, with the largest declines seen among below
prime risk tiers. The new/used split continues to trend back
towards its pre-pandemic norm. As we see inventories continue to
build back following the pandemic, leasing for Q1 2024 represented
24% of new vehicle registrations, still well below the 30% seen in
Q1 2020, however up from 19% in Q1 2023. The average amount
financed, monthly payment, and term length have all remained
relatively flat for both new and used vehicles YOY. Account-level
60+ DPD delinquency saw an uptick to 1.33% in Q1 2024.
Instant Analysis
“Affordability continues to pose a challenge for the used
vehicle market and, in particular, for below prime consumers, who
have seen a buying climate of higher interest rates, increasing
lender pullback, and cross-wallet inflation. While some brands
continue to see lingering shortages, new vehicle inventories
continue to recover from their pandemic-era lows. This has given
the leasing market a boost, although leasing still remains well
below its pre-pandemic numbers. Higher delinquencies are likely to
further constrain loan availability, potentially keeping the market
tempered until interest rates begin to see declines.”
- Satyan Merchant, senior vice president, automotive and
mortgage business leader at TransUnion
Auto Lending Metric |
Q1 2024 |
Q1 2023 |
Q1 2022 |
Q1 2021 |
Total Auto Loan Accounts |
80.1 million |
80.1 million |
80.5 million |
82.2 million |
Prior Quarter Originations1 |
5.8 million |
5.8 million |
6.5 million |
6.6 million |
Average Monthly Payment NEW2 |
$744 |
$741 |
$657 |
$588 |
Average Monthly Payment
USED2 |
$525 |
$521 |
$509 |
$418 |
Average Balance per Consumer |
$24,035 |
$23,214 |
$21,606 |
$20,059 |
Average Amount Financed on New Auto
Loans2 |
$41,165 |
$41,547 |
$40,186 |
$36,207 |
Average Amount Financed on Used Auto
Loans2 |
$25,977 |
$26,260 |
$27,986 |
$22,295 |
Consumer-Level Delinquency Rate (60+ DPD) |
1.5% |
1.3% |
1.1% |
1.0% |
1Note: Originations are viewed one quarter in arrears to account
for reporting lag.2Data from S&P Global
MobilityAutoCreditInsight, Q1 2024 data only for months of January
& February.Click here for additional auto industry metrics.
Click here for a Q1 2024 auto infographic.
For more information about the report, please register for
the Q1 2024 Credit Industry Insight Report webinar.
About TransUnion (NYSE: TRU)
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over 13,000 associates operating in more than 30 countries. We make
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Good® — and it leads to economic opportunity, great experiences and
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http://www.transunion.com/business
Contact |
Dave BlumbergTransUnion |
|
|
E-mail |
dblumberg@transunion.com |
|
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Telephone |
312-972-6646 |
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