Credit Card Debt Increasing Across the Nation's Largest Metro Areas
New Equifax Data Provides Latest Signs of Continued Economic Recovery
ATLANTA, Aug. 26, 2014 (GLOBE NEWSWIRE) -- With the recession increasingly in the rearview mirror, consumers across the U.S. are taking on more credit card debt, according to the latest data from Equifax (NYSE:EFX). The company attributed the credit card surge, in part, to increased lending to subprime borrowers.
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A graph accompanying this release is available at https://media.globenewswire.com/cache/23864/file/28436.pdf
Equifax's new National Consumer Trends Credit Report revealed that consumers in each of the nation's 25 largest metropolitan areas increased credit card debt in the second quarter of 2014 compared to the same period one year ago. Last year at this time, seven of the top 25 metro areas had experienced declines in credit card debt.
The rise in credit card debt is a positive step for the U.S. economy, as economists generally believe increased debt levels signal growing consumer confidence. Nationally, credit card debt levels rose from $586.8 trillion in the second quarter of 2013 to $604 trillion in the most recent quarter, a nearly 3 percent increase.
"It's encouraging that both the supply and demand of credit is rising across the country," said Trey Loughran, president of Equifax Personal Solutions. "It's important for consumers to have access to credit so that they can rebuild their credit portfolios in a disciplined manner and help the economy continue to grow."
Consumers in areas hardest hit by the recession showed some of the biggest gains in credit card debt. The Las Vegas, Orlando and Miami metro areas – all ravaged by the collapse of the housing industry – were among the top five markets for increased credit card debt. Joining them were Houston and Dallas, which escaped the recession largely unscathed and have consistently experienced increases in credit card and total consumer debt.
The smallest gains were reported in St. Louis, Cleveland, Chicago and Detroit, where economic recovery has been slower.
Equifax said the rise in credit card debt is due, in part, to lenders who are increasingly issuing credit cards to consumers with subprime credit scores. The company said that one out of every three new cards is issued to an individual with a subprime score, compared to one in four immediately following the recession.
Although the definition of a subprime borrower varies and has changed since the recession, Equifax said a credit score below 660 is generally considered to be in the subprime range. That group saw a 5.5 percent increase in credit card debt in the past year, according to Equifax.
Loughran said that both of these trends are encouraging. Lenders are showing they are comfortable putting credit cards in consumers' hands again, even those with battle scars from the financial crisis, and consumers are demonstrating that they are looking to rebuild financially but in a more responsible manner than prior to the recession. They are doing that, he added, by "taking out credit and showing they can pay on time."
About Equifax
Equifax Personal Solutions empowers consumers with the confidence and control to be their financial best. Find out more about Equifax's innovative suite of credit monitoring and identity protection products at www.equifax.com. Learn about identity theft and how to help protect yourself and your family at IdentityProtection.com. Get smart information on everything from credit to retirement, all in one place at the Equifax Finance Blog, blog.equifax.com.
Equifax is a global leader in consumer, commercial and workforce information solutions, providing businesses of all sizes and consumers with information they can trust. We organize and assimilate data on more than 500 million consumers and 81 million businesses worldwide, and use advanced analytics and proprietary technology to create and deliver customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 18 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. For more information, please visit www.equifax.com.
CONTACT: Mark Braykovich
(404) 343-0886
mbraykovich@thewilbertgroup.com
Meredith Griffanti
(404) 885-8913
meredith.griffanti@equifax.com
Released August 26, 2014