Market Overview

As Black Friday Nears, a Record 196 Million Consumers Now Have Access to Various Forms of Credit Cards and Other Revolving Lines of Credit


CHICAGO, Nov. 15, 2017 (GLOBE NEWSWIRE) -- With the holiday shopping season officially kicking off during Black Friday next week, TransUnion's (NYSE:TRU) just released Q3 2017 Industry Insights Report found that 195.9 million consumers now have access to revolving credit such as bank-issued and private label credit cards. According to the report, powered by PramaSM analytics, this is the highest level of revolving credit access since TransUnion began measuring the variable and is greater than the 192.6 million consumers who had access to such credit products in Q3 2016.

TransUnion also found that, as of Q3 2017, a record 142.5 million consumers had a balance on non-revolving loans. This is up from 140.1 million in Q3 2016. Non-revolving loans are primarily comprised of auto loans, mortgages, student loans and unsecured personal loans.

The number of consumers with the aforementioned credit products, especially revolving lines of credit, will more than likely grow during the upcoming holiday shopping season. In November and December 2016, TransUnion found that average originations for private label credit cards doubled for online (2.00x) and discount store (1.95x) retailers compared to average monthly originations over the rest of the year (January through October)

"The third quarter of 2017 exhibited a lending market that continued to operate in a stable manner, with consumers continuing to gain access to credit and take advantage of that access," said Ezra Becker, senior vice president and head of research and consulting for TransUnion. "However, we are beginning to see a slowdown in originations, which may be a signal of saturation in the lower-risk credit tiers and some pull-back in lender risk appetite in the higher-risk tiers.

"Despite the slowdown, we anticipate a robust holiday shopping season. The University of Michigan's consumer sentiment measure rose 4% this September compared to last, demonstrating that consumers have continued positive expectations regarding the overall economy. As a result, we expect this will lead to strong consumer credit activity during the upcoming holiday season."

TransUnion's analysis found that average private label card originations in the holiday season (defined as November and December) for 2016 was 148% of the average monthly originations in the January through October timeframe. This is tracking in line with recent rises observed in 2015 (156%) and 2014 (164%). "On average, consumers are about 1 ½ times more likely to open a private label credit card in the holiday season compared to any other month of the year. Much of this increase is due to the credit offers extended by retailers and their lending partners in anticipation of the shopping season," Becker added.

Please visit TransUnion's Industry Insights Report website for more charts and details about the Q3 2017 Industry Insights Report or to register for TransUnion's Q3 2017 Industry Insights Webinar.

Total Credit Balances Rise despite Slowdown in New Credit Card Accounts

Q3 2017 IIR Credit Card Summary
TransUnion's Q3 2017 Industry Insights Report found that total credit card balances continued to grow on an annual basis, rising 7% to $731 billion in Q3 2017 from $683 billion in Q3 2016. MSAs experiencing the largest annual credit card debt per borrower increases included Miami (+5.5%) and Houston (+4.7%), both areas impacted by hurricanes during the month of September. Even as balances rose in those markets and elsewhere, the number of overall new credit card accounts decreased 12.1% between Q2 2016 and Q2 2017 (originations are viewed one quarter in arrears to ensure all accounts are included in the data). Q3 marked the third quarter in a row new account growth had decreased on an annual basis. While serious delinquency rates increased to 1.68% in Q3 2017 from 1.53% in Q3 2016, they remain relatively low on a historical basis and are in line with TransUnion's forecast from last December that pointed to a year-end 1.65% delinquency rate. 

Instant Analysis
"The robust increase in credit card balances is a reflection of new account growth observed in 2016.  Consumers with new access to credit cards clearly used them and built balances. Not surprisingly, subprime consumers experienced the largest annual increase in serious delinquency rates, though we also observed new account balance declines in this group as well. Overall, the market is performing in line with our expectations at the beginning of the year and we do not anticipate any marked changes to this sector at the end of the year."
- Paul Siegfried, senior vice president and credit card business leader at TransUnion

Q3 2017 Credit Card Trends


Credit Card Lending Metric
Q3 2017 Q3 2016 Q3 2015 Q3 2014

Number of Credit Card Loans

414.3 million

398.5 million

374.2 million

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





Average Debt Per Borrower
$5,483   $5,323   $5,229   $5,251  
Prior Quarter Originations* 15.5 million 17.6 million 15.3 million  

13.7 million
Average New Account Credit Lines* $5,307   $5,252  



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

Q3 2017 Credit Card Loan Performance by Age Group

Age/Variable 90+ DPD Annual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (1995 – present) 2.55 % 15.5 % $ 1,101 28.5 %
Millennials (1980-1994) 2.48 % 5.6 % $ 4,028 12.0 %
Gen X (1965-1979) 2.10 % 7.7 % $ 6,997 4.9 %
Baby Boomers (1946-1964) 1.11 % 8.8 % $ 6,351 0.8 %
Silent (Until 1945) 0.74 % 10.2 % $ 3,928 0.2 %

Auto Loan Market Shifting Toward Less Risky Consumers

Q3 2017 IIR Auto Loan Summary
For the fourth consecutive quarter, auto loan originations decreased on a year-over-year basis, declining 2.2% between Q2 2016 and Q2 2017. The decline was driven by a 5.9% drop in subprime, near prime and prime loan openings. This was partially offset by a 3.2% rise in loans originated to the least risky consumers in the prime plus and super prime risk categories over the same time period. As a result of this shift, 2.3 points of market share have shifted from subprime, near prime and prime to prime plus and super prime. While overall auto loan balances rose 5.9% between Q3 2016 and Q3 2017, this marked the lowest year-over-year growth rate since Q3 2012. As balance growth slowed, serious auto loan delinquency rates (60+ DPD) rose seven basis points in the last year to close Q3 2017 at 1.40%.

Instant Analysis
"Though serious auto loan delinquency rates are slowly rising, we still do not believe this is a cause for concern. The recent uptick in delinquencies was driven primarily by ‘relaxed' underwriting standards from recent years, which drove non-prime origination growth. The recent decline in originations is due to the tightening of underwriting requirements and the slowing demand for new vehicles. Despite fewer originations, there is evidence that more people will be opening auto loans in the near term. In September, U.S. light vehicle sales increased for the first time this year on an annual basis. Also, there will likely be several thousand new vehicles purchased as a result of the hurricanes in Florida and Texas."
- Brian Landau, senior vice president and automotive business leader at TransUnion

Q3 2017 Auto Loan Trends


Auto Lending Metric
Q3 2017 Q3 2016 Q3 2015 Q3 2014

Number of Auto Loans

78.6 million

74.8 million

69.8 million

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





Average Debt Per Borrower
$18,567   $18,361   $17,946   $17,351  
Prior Quarter Originations* 7.1 million 7.3 million 7.2 million 6.8 million
Average Balance
of New Auto Loans*





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

Q3 2017 Auto Loan Performance by Age Group

Age/Variable 60+ DPD Annual Pct.
Average Loan
Balances Per
Annual Pct.
Gen Z (19
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