Consumers Turn to Unsecured Credit

By Staff Writer November 17, 2022 171
Credit card balances continue to grow, with bankcard balances reaching a record high of $866 billion in Q3 2022. Credit card balances continue to grow, with bankcard balances reaching a record high of $866 billion in Q3 2022.

The third quarter of 2022 saw more consumers turning to unsecured personal loans and credit cards as a means to help stave off the financial pressures brought on by inflation. TransUnion’s newly released Q3 2022 Quarterly Credit Industry Insights Report also shows that while delinquencies for most credit products remain in line with pre-pandemic levels, they continue to rise from the very low levels seen in 2021, particularly among subprime segments of customers. 

“Delinquencies remain in line with historical levels for most credit products,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion. “However, levels have been rising over the past year, particularly among subprime consumer segments, and should be monitored in the coming months to look for similar increases in other credit risk tiers.”

Credit card balances continue to grow, with bankcard balances reaching a record high of $866 billion in Q3 2022, which represents a year-over-year (YoY) increase of 19%. This increase was heavily driven by growth among Gen Z and Millennial borrowers, among whom balances grew by 72% and 32%, respectively. Private label balances are also at a record high, up 7.3% YoY. Private label total and average credit lines have also increased to record highs, as have average number of accounts per consumer.

Delinquencies have also risen and in Q3 2022 were slightly higher than the level seen pre-pandemic in Q3 2019. Bankcard charge-offs, for now, continued to decline, down for the sixth consecutive quarter. Charge-off balances are showing an upward trend among private label after seven consecutive quarterly declines.

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Last modified on Thursday, 17 November 2022 13:33