Credit Card Usage at All-Time Highs, But Delinquency Rates Still Remain in Check

Q1 2018 TransUnion Industry Insights Report features latest consumer credit trends

CHICAGO, May 08, 2018 (GLOBE NEWSWIRE) -- With more than 416 million credit cards and nearly 175 million consumers with access to them, credit card usage continued its upward trajectory in Q1 2018. The latest TransUnion (NYSE:TRU) Q1 2018 Industry Insights Report, powered by PramaSM analytics and released during Card Forum 2018, features data and insights on consumer credit trends including reasons why credit cards are still performing relatively well despite the continued rise in serious delinquency rates.

TransUnion’s report found that serious credit card delinquency rates per borrower (90+ DPD) increased in Q1 2018 to 1.78%, up from 1.69% in Q1 2017. The delinquency rate is now level with the 1.77% mark observed six years prior in Q1 2012, though it remains below the 10-year first quarter average of 1.91%. The average card debt per borrower also followed a similar path as delinquencies during the last year, rising 2.63% to $5,472 in Q1 2018 from $5,332 in Q1 2017.

“Though delinquency rates are certainly rising, there are several reasons we do not believe this is a worrisome trend at this juncture,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. “First, credit card issuers have been relatively conservative over the last five quarters, issuing more credit to lower-risk consumers compared to higher-risk consumers. Second, the credit limits they are extending to consumers in most risk tiers are generally lower than those they had issued in prior years. Finally, we believe it’s a positive sign for the economy that more consumers have access to credit and that delinquency rates, while growing, are doing so at a slow pace and remain below levels observed immediately post-recession.”

Q1 Credit Card Trends


Credit Card Lending Metric
Q1 2018Q1 2017Q1 2016Q1 2015 

Q1 2012

Number of Credit Cards

416.5 million

405.8 million

386.4 million

365.8 million

339.9 million
Consumers with Access to a Credit Card 

174.9 million

171.4 million

166.1 million

160.6 million

149.4 million
 Borrower-Level Delinquency Rate (90+ DPD)  






Average Debt Per Borrower
$5,472 $5,332 $5,193 $5,144 

$ 5,299 
Prior Quarter Originations*16.0 million16.0 million16.7 million 

14.5 million

11.5 million
Average New Account Credit Lines*

$ 5,283 

$ 5,262 

$ 5,091 

$ 4,783 

$ 4,704 

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

The number of credit card accounts rose 2.6% in the last year to 416.5 million in Q1 2018, up from 405.8 million in Q1 2017. In that same timeframe, the number of consumers with access to a credit card also increased by 2.1% to 174.9 million from 171.4 million one year ago.

The latest origination data point to a modest 1% growth rate between Q4 2017 and Q4 2016 (originations are viewed one quarter in arrears to ensure all accounts are included in the data). This was notable because it was the first annual increase observed in the five quarters since Q3 2016. 

Growth was driven by an increase in originations for super prime (+4.9%) and prime plus (+3.2%) borrowers, as lenders mitigated risk by slowing originations for the higher-risk tiers, i.e. subprime and near prime (-2.7% combined). Despite growth in originations for prime plus and above, credit card lenders continued to manage credit exposure by generally decreasing average new account credit lines across risk tiers.

From a generational perspective, TransUnion observed the most balance growth on a percentage basis from Gen Z and Millennials. However, Gen X borrowers had by far the highest balances of any generation. 

Q1 2018 Credit Card Performance by Age Group

Generation90+ DPDAnnual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (1995 – present)2.53%-2.3%$ 1,181+24.3%
Millennials (1980-1994)2.51%+1.2%$ 4,143+10.5%
Gen X (1965-1979)2.24%+3.2%$ 7,029+4.2%
Baby Boomers (1946-1964)1.20%+5.3%$ 6,281+0.6%
Silent (Until 1945)0.81%+9.5%$ 3,885+0.1%

“Credit cards are a vital part of the consumer credit economy, and their continued good performance bodes well for other credit products such as auto loans and mortgages. It’s also a good indicator of the product’s popularity that the youngest generations continue to grow their card balances and generally appear to manage their debts effectively,” said Matt Komos, vice president of research and consulting at TransUnion. “In line with our forecast for the year, the consumer credit market continues to perform well, and we do not see any indicators of concern in the short- or mid-term.”

Changes between Q1 2018 and Q1 2017 for Key Consumer Credit Metrics

Credit ProductChange in
Number of New
Change in Serious
Change in
Average Debt Per
Change in
Borrowers with a
Auto+4.4%+ 2 bps+ $195 + 0.9%
Credit Card+2.6%+ 11 bps+ $140+ 3.3%
Mortgage+0.7%- 30 bps + $5,699- 4.8%
Personal Loans+13.2%- 21 bps + $383+ 7.8%

*Note that bps = basis points; 1 bp = 0.01%. Serious delinquency is defined here as borrower delinquency rates of 60 or more days past due (60+ DPD) for all credit products except credit cards, for which 90+ DPD is used.

Please visit TransUnion’s Industry Insights Report website for more charts and details about the Q1 2018 Industry Insights Report or to register for TransUnion's Q1 2018 Industry Insights Webinar. Consumers interested in learning more about their credit score and credit reports can click here.

Oil States and Continued Share Shifting Help Stabilize Auto Loan Delinquency Rates

Q1 2018 IIR Auto Loan Summary
TransUnion’s Industry Insights Report found that tighter underwriting and improvements in the oil states appear to be positively impacting serious auto loan delinquency rates per borrower (60+ DPD). After growing from 1.16% in Q1 2016 to 1.30% in Q1 2017, the serious delinquency rate stayed relatively flat at 1.32% in Q1 2018. The top six states with the largest annual decreases in delinquency rates in Q1 2018 – Alaska, Wyoming, Texas, New Mexico, Oklahoma and North Dakota – are among the eight states where oil, gas, and mining account for 10% or more of gross domestic product. The other two states – Louisiana and West Virginia – also performed better than the national average in terms of annual changes in 60+DPD rates for Q1 2018.

While total auto balances rose 5.2% to $1.183 trillion, this marked the lowest annual growth rate since Q1 2012, which at the time was 4.2% and on the rise. TransUnion also observed continued shifting in the origination makeup of auto loan borrowers, which continues to migrate to higher credit tiers. Overall originations, viewed one quarter in arrears to account for reporting lag, declined 1.5% in Q4 2017. This marked the sixth consecutive quarter of yearly declines, though the smallest such decrease in 2017.

Instant Analysis

“The first quarter of 2018 was relatively quiet in the auto finance space. The most noteworthy change was the stabilization in the delinquency rate, likely due to shifts in the makeup of new auto loan borrowers and continued improvements in oil states. Gas prices, as measured by WTI crude, have increased more than 21% in the last year, which has provided a significant boost to the local economies of oil producing states. Origination mix continues to shift toward lower risk, with super prime and prime plus taking 1.8 points of share from prime, near prime and subprime on an annual basis. This continues the trend from last year, where the shift to the two lowest-risk tiers was 1.6 points. Finally, we believe the slowdown in auto loan balance growth is largely due to the decline in originations, as lenders continue to tighten their underwriting requirements and rising interest rates put a slight damper on demand.”

  • Brian Landau, senior vice president and automotive business leader at TransUnion

Q1 2018 Auto Loan Trends


Auto Lending Metric
Q1 2018Q1 2017Q1 2016Q1 2015

Number of Auto Loans

79.7 million

76.4 million

72.2 million

66.4 million
 Borrower-Level Delinquency Rate (60+ DPD)1.32% 


Average Debt Per Borrower
$18,581 $18,386 $18,065 $17,512 
Prior Quarter Originations*6.6 million6.7 million6.7 million6.3 million
Average Balance
of New Auto Loans*

$ 21,678 

$ 21,071 

$ 20,598 

$ 20,045 

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q1 2018 Auto Loan Performance by Age Group

Generation60+ DPDAnnual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (1995 – present)1.76%-1.1%$ 13,876+ 2.8%
Millennials (1980-1994)1.70%-1.2%$ 17,650+ 2.0%
Gen X (1965-1979)1.49%-0.7%$ 20,874+ 1.7%
Baby Boomers (1946-1964)0.84%+2.4%$ 18,485+ 0.5%
Silent (Until 1945)0.77%+8.5%$ 14,512- 1.2%

Year-over-Year Mortgage Delinquency Rate Drops for 19th Straight Quarter

Q1 2018 IIR Mortgage Loan Summary
The mortgage market continued to perform well at the beginning of 2018. The serious mortgage delinquency rate (60+ DPD) declined to 1.74% in Q1 2018, down from 2.07% in Q1 2017.  Year-over-year delinquency rates have now dropped 19 straight quarters since Q3 2013. While reported delinquencies have dropped, the hurricanes in Q3 of last year have driven an interesting dynamic related to the number accounts in forbearance, which are typically reported as current to credit reporting agencies regardless of their actual payment status. Houston, Miami, and Tampa were the MSAs most impacted by the hurricanes. In those areas, only 1,800 out of 2.36 million active mortgages were reported to be in some form of forbearance status in Q2 2017, prior to the hurricanes. That number skyrocketed to 164,000 mortgages in some form of forbearance status by the end of Q1 2018. While balances rose in aggregate for the year, average new mortgage loan balances declined from $235,361 in Q1 2017 to $229,538 in Q1 2018, likely a result of declining refinancing activity and a lower share of super prime loans. That shift in new origination mix pushed subprime and near prime originations to 16.0% in Q4 2017 from 14.4% in Q4 2016. 

Instant Analysis
“The opening quarter of 2018 was more of the same on the mortgage delinquency front. Borrowers continue to perform well, making on-time payments that are more in line with traditional patterns observed prior to the mortgage crisis. It is also encouraging that balances continue to increase, as new purchase originations outpace paydowns. As time passes from the housing bubble and mortgage loan performance continues to remain exceptionally low, non-prime borrowers may begin to see their access to mortgage credit open up. However, it’s likely that mortgage lenders will approach the non-prime market cautiously, incorporating new alternative data sources to determine which non-prime borrowers offer the least risk. We will also monitor the forbearance population in areas affected by last year’s hurricanes to better understand that dynamic and its influence on the region’s mortgage market.”

  • Joe Mellman, senior vice president and mortgage business leader at TransUnion

Q1 2018 Mortgage Loan Trends


Mortgage Lending Metric
Q1 2018Q1 2017Q1 2016Q1 2015

Number of Mortgage Loans

53.1 million

52.8 million

52.9 million

53.5 million
 Borrower-Level Delinquency Rate (60+ DPD)  





Average Debt Per Borrower
$202,470 $196,772 $191,927 $187,153 
Prior Quarter Originations*1.8 million2.1 million1.6 million1.4 million
Prior Quarter Average Balance
of New Mortgage Loans*

$ 229,538 

$ 235,361 

$ 220,138 

$ 206,258 

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q1 2018 Mortgage Loan Performance by Age

Generation60+ DPDAnnual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (1995 – present)1.20%-3.2%$ 142,843+7.5%
Millennials (1980-1994)1.41%-14.5%$ 212,655+5.8%
Gen X (1965-1979)2.16%-16.6%$ 231,410+2.2%
Baby Boomers (1946-1964)1.52%-16.0%$ 182,405+1.3%
Silent (Until 1945)1.74%-8.9%$ 150,347+1.1%

Personal Loan Popularity Grows as Originations Jump to Highest Level Since 2015

Q1 2018 IIR Personal Loan Summary
The popularity of unsecured personal loans continued in Q1 2018, with the number of outstanding loans rising to 19.2 million from 16.9 million the previous year. Total balances rose to $120 billion from $102 billion in that same timeframe.  Personal loan originations increased to 4.6 million in Q4 2017, up from 3.7 million in Q4 2016, exceeding the prior post-recession high of 4.1 million originations in Q4 2015. Even as more personal loans are issued, loan performance remains strong in the aggregate. Serious personal loan delinquency rates per borrower (60+ DPD) declined to 3.51% in Q1 2018 from 3.72% in Q1 2017. Average debt per borrower for unsecured loans also has risen to $7,986 in Q1 2018, an increase of nearly $300 from the previous year.

Instant Analysis
“We observed continued strong growth in unsecured installment lending at the beginning of 2018. The acceleration in the number of loans offered to consumers is a result of low unemployment and a favorable regulatory environment. Online short-term lenders now feel that they can enter this space, and more traditional lenders have been doing so for the last few quarters. As such, many lenders are utilizing even more alternative data assets to gain a business edge in this growing, competitive market. The increased competition bodes well for consumers, as they will have more options available to them in the consumer lending market. At the same time, lenders should keep an eye on vintage loan performance. Rapid portfolio growth can lower aggregate delinquency measures as new, not-yet-delinquent balances outpace more seasoned loans.”   

  • Jason Laky, senior vice president and consumer lending business leader at TransUnion

Q1 2018 Unsecured Personal Loan Trends


Personal Loan Metric
Q1 2018Q1 2017Q1 2016Q1 2015
Total Balances$120 billion$102 billion$93 billion$72 billion
Number of Unsecured Personal Loans 

19.2 million

16.9 million

15.4 million

13.1 million
 Borrower-Level Delinquency Rate (60+ DPD)  





Average Debt Per Borrower
$7,986 $7,603 $7,544 $6,876 
Prior Quarter Originations*4.6 million3.7 million4.1 million3.6 million
Average Balance of New Unsecured Personal Loans*

$ 5,044 

$ 5,132 

$ 5,077 

$ 4,345 

*Note: Originations are viewed one quarter in arrears to account for reporting lag.

Q1 2018 Unsecured Personal Loan Performance by Age

Generation60+ DPDAnnual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (1995 – present)6.30%-9.9%$ 3,114+16.9%
Millennials (1980-1994)4.60%-10.9%$ 6,950+9.9%
Gen X (1965-1979)3.47%-7.0%$ 9,252+5.9%
Baby Boomers (1946-1964)2.55%-3.0%$ 8,211+3.2%
Silent (Until 1945)2.50%+4.2%$ 6,813+0.6%

About TransUnion (NYSE:TRU)

Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide. We call this Information for Good

Contact    Dave Blumberg
Telephone 312-972-6646