According to the latest Equifax National Consumer Credit Trends Report, the total number of open retail-issued credit cards is greater than 183 million, the most since September of 2009. Further, total balances on retail-issued credit cards surpassed $56 billion, a year-over-year increase of over 6.4%. Here’s what the report said about housing and other financial sectors:
>> At $46.6 billion, the total limit of new credit issued January-August of 2013 is an increase of 11.6% over the same period last year;
>> In that same time, 24.6 million new card accounts were issued, the highest since 2008, and an increase of 8.8% over same time a year ago; and
>> Year-to-date lending through August 2013 to subprime credit borrowers, defined as those with Equifax Risk scores below 660, increased 15.8% over the same time a year ago—8.2 million loans were originated, a six year high;
Write-Offs and Delinquencies:
>> Retail-issued credit card write-offs were down nearly 14% compared to October 2012 (from 8.24% to 7.09%); and
>> In that same time, 60-day delinquency rates for retail cards fell slightly, from 3.52% to 3.48%.
“The holiday season is almost upon us and retailers are eager to capture the hearts and wallets of the American consumer,” said Equifax Chief Economist Amy Crews Cutts. “Retail cards are a great way to do both. Retailers can leverage these cards to drive traffic to their stores through special offers to cardholders and can encourage larger purchases by offering favorable interest-rate promotions for big ticket items. As long as consumers resist the urge to overspend, these cards can be a great way to save money when holiday shopping.”
Other highlights from the most recent Equifax data include:
Bank-Issued Credit Card:
>> At $128.7 billion, the total limit of new credit issued between January-August 2013 is a five-year high for that year-to-date period and an increase of 9.1% over the same time a year ago ($117.9 billion);
>> The total number of new loans year-to-date in August 2013 is 27.6 million, a five-year high and an increase of 7.3% from same time a year ago;
>> The total number of existing loans in October 2013 is more than 312 million, the highest since December 2009;
>> The total outstanding balance on bank-issued credit cards ($537.2 billion) has increased year-over-year for four consecutive months. This marks the first time in more than five years that such an increase has occurred;
>> From October 2012-2013, 60-day delinquency rates decreased 13.6% (from 2.18% to 1.88%); and
>> In that same time, write offs decreased 18.4% (from 4.81% to 3.92%).
>> The total number of loans outstanding in October 2013 is nearly 62 million, a 5 year high;
>> By source, loans funded by banks, savings and loans or credit unions are at $411.6 billion, while the total number of loans is 29.9 million — all-time highs for both;
>> The total outstanding balance for loans funded by auto finance companies is $435.1 billion, while the total number of existing loans is more than 32 million, its highest level since January 2009; and
>> The total balance of auto loan originations year-to-date in August 2013 is 327.3 billion, an increase of 15.6% from same time a year ago and the most new credit originated for that time period in more than eight years.
>> The total balance of first mortgages in October 2013 is $7.6 trillion, a decrease of 1.7% from same time a year ago;
>> The total balance of first mortgage severe delinquencies (90-days past due or in foreclosure) is less than $300 billion for the first time in more than five years and a decrease of more than 30% from same time a year ago;
>> In October 2013, the total balance of home equity revolving loans is $494.1 billion, a decrease of 7.3% from same time a year ago and a five-year low. Similarly, the total number of loans outstanding in October is less than 10.5 million,
>> The total balance of severely delinquent home equity revolving loans in October 2013 is less than $9 billion, a decrease of more than 20% from same time a year ago; and
The total balance of home equity installment loans is $134.3 billion, a decrease of 4.8% from same time a year ago, while the total number of loans outstanding is 3.8 million; for both, these are more than 8-year lows.
About The Author
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at firstname.lastname@example.org.