Credit Card Balances Continue Declining in 2021

Q1 2021 IIR Credit Card Summary

Credit card balances continued to fall in Q1 2021, with total balances falling to $688 billion from $814 billion the previous quarter.

The average consumer credit card debt per borrower fell to $4,791, the lowest amount since TransUnion began tracking this variable in 2009. Over the same time period, total credit card originations declined about 18 percent across all credit risk classes, with average lines on new accounts falling 28 percent. Despite this drop, the number of people who have access to a credit card has climbed by 2.1 percent to 188 million in the last year. This is the tenth consecutive year of growth. In Q1 2021, serious consumer delinquency rates (90 days or more past due) fell to 1.25 percent, down 72 basis points from the previous quarter. This massive decline is most likely due to a mix of customers having greater liquidity as a result of various government stimulus programs and borrowers protecting this credit product throughout the epidemic.

Analysis

In the first half of 2021, Transunion saw a continuation of the fall in credit card balances, as many consumers used stimulus payments and tax refunds to pay down their obligations. The volume of new account openings has continued to rise and is now back to ‘normal’ levels. Consumers applying for new credit cards have found that the queues have been quite short, as lenders try to account for the market’s ongoing uncertainty. Transunion expects originations and credit lines to return to levels seen in previous years as more issuers ramp up their acquisition marketing efforts with new and sophisticated approaches.”

 

Marcadis Singer, PA
5104 South Westshore Blvd.,
Tampa, Florida.
Phone: (813) 288-1881

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