November 10, 2014

Equifax Reports New Credit Growth for Bank- and Retail-Issued Cards Led by Subprime Segment

ATLANTA, Nov. 10, 2014 /PRNewswire/ -- According to the latest Equifax National Consumer Credit Trends Report, new credit growth for bank- and retail-issued cards is strongest among subprime borrowers, defined as consumers with Equifax Risk Scores of 660 or lower.

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Year-over-year increases in new credit originated for subprime borrowers year-to-date in July include:

  • Bank-issued credit card limits: 43.5% ($8.83 billion to $12.68 billion, a six-year high);
  • Bank-issued credit cards: 42.9% (6.88 million to 9.84 million, a six-year high);
  • Retail-issued credit card limits: 16.2% ($5.91 billion to $6.87 billion, an eight-year high);
  • Retail-issued credit cards: 12.8% (6.9 million to 7.8 million, an eight-year high).

"As the economy improves, consumers appear to be ready to expand, or in some cases, rebuild their credit," said Amy Crews Cutts, Senior Vice President and Chief Economist at Equifax. "New credit card accounts for those consumers with a subprime credit score have shown more than a 40% increase to date this year over the same time last year. This reflects both consumers' appetite for new credit, and lenders' willingness to offer it. Interestingly, balances for both subprime and prime have risen very little, suggesting that while consumers are positioning themselves for growth - they are also hesitant to take on new debt."

Brad Jones, Retail Banking Leader for Equifax, stated, "As consumers continue to become less credit averse, financial institutions are in a different position than in the past 5-6 years. Those organizations that use best-in-class data to gain a true understanding of consumer trajectory will not only know where a customer is, but where they are headed, for more informed decisioning and targeting."

Other highlights from the most recent Equifax data include:

Bank-issued credit card

  • The total number of loans outstanding in that same time is more than 325 million, the highest in more than five years;
  • The total bank card balances outstanding  in September  2014 is $557.7 billion, the highest total in 44 months;
  • The total number of new cards issued year-to-date in July 2014 is 28.8 million, a six-year high and an increase of 21.3% from same time a year ago;
  • The total limit of new credit for bank-issued credit cards in that same time is $141 billion, a seven-year high and an increase of 27.8%;
  • The write-off rate as a percentage of total balances outstanding in September 2014 is 3.48%, a decline of 15.9% from same time a year ago;
  • The total balance of available credit is more than $2.56 trillion, a five-year high;
  • Available credit, which is the difference between the total credit limit and balances, in September 2014 is higher than $2 Trillion for the first time since March of 2009;
  • Utilization, which is the ratio of balances to the total credit limit, has remained less than 22% since the beginning of the year.

Retail-issued Credit Card:

  • The total number of loans outstanding in September 2014 is more than 195 million, the highest level since January of 2009;
  • Similarly, the total outstanding balance is $59.6 billion, an increase of 6.7% from same time a year ago and the second-highest level in 2014;
  • The total number of new cards issued year-to-date in July 2014 is 21.7 million, a seven-year high and an increase of 2.7% from same time a year ago;
  • The total limit of new credit originated in that same time is $41.3 billion, a six-year high and an increase of 2.7%;
  • The write-off rate as a percentage of total balances outstanding in September 2014 is 7.04%, a decline of 3.5% from same time a year ago;

About Equifax, Inc.

Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide.  The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 19 countries and is a member of Standard & Poor's (S&P) 500® Index.  Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.  

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