More consumers getting new credit cards
Credit card originations up in Q2
The number of consumers opening new credit card accounts increased on a yearly basis in the second quarter (Q2) of 2012, TransUnion said in a recent report.
According to TransUnion, the total amount of new credit cards originating in Q2 2012 came in 4 percent higher than one year earlier in Q2 2011.
Relative to one year earlier, fewer of the new credit card accounts opened in Q2 2012 were opened by higher-risk (non-prime) consumers. The share of credit card originations associated with non-prime consumers was 26.1 percent, lower than the 27.0 percent seen in Q2 2011.
However, both the 2011 and 2012 non-primes figures are higher than the 20.6 percent seen in Q2 2010, TransUnion noted.
Credit card delinquency rate falls
The national credit card delinquency rate – the share of credit card borrowers that are 90 or more days past due – dropped on a quarterly basis in Q2, TransUnion said.
In Q2, the credit card delinquency rate fell to 0.63 percent, down from 0.73 percent in the first quarter (Q1) of 2012. This is the lowest observed national credit card delinquency rates in a year, since Q2 2011.
“The national credit card delinquency rate continues to remain at the lowest levels we’ve observed in 18 years,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a statement.
Becker continued: “It’s a positive situation because average borrower balances have increased over the past year as new card originations have grown. These low delinquency rates reflect both continued conservatism in lender underwriting and the ongoing prioritization of card payments among consumers.”
TransUnion forecasts that credit card delinquencies will remain near current levels through the remainder of 2012.