Credit Card Balances Increase Year-Over-Year for the First Time in 5 Years

According to Equifax’s (NYSE:EFX) latest National Consumer Credit Trends Report, the total balance of bank credit cards increased slightly over the year ending July 2013 (from $533.3 to $536.5 billion), realizing the first year-over-year increase in 5 years.

For other verticals, year-over-year changes in balances include:

• Student loan: increased 11.3% (from $794.6 billion to $884.2 billion);

• Auto: Increased 10.9% (from $745.3 billion to $826.8 billion);

• First mortgage: decreased 0.9% (from $7.79 trillion to $7.72 trillion);

• Home equity installment: decreased 4.1% (from $142.3 billion to $136.5); and

• Home equity revolving: decreased 8.9% (from $553.2 billion to $504.1 billion).

“Only two major consumer credit segments are currently growing: auto financing and student loans,” said Equifax Chief Economist Amy Crews Cutts. “In all other segments, consumers are reducing their debt burdens, either negatively, through foreclosures and bankruptcies, or positively, through payoffs — payoffs are dominating in most cases today. We expect mortgage balances to begin rising again over the next several months as new home purchase loans overtake foreclosures and payoffs.”

Other highlights from the most recent data include:

Bankcard

• Serious delinquencies represent 1.86% of outstanding balances in July 2013, a decrease of more than 11% year-over-year;

• The total of new credit opened between January-May 2013 is the highest since 2008 and an increase of more than 6% from same time a year ago ($72.9 billion to $77.7 billion);

• From January-May 2013, the total number of new loans also increased more than 6% from same time a year ago, from 15.6 million to 16.6 million; and

• Both new loans and new credit year-to-date in May 2013 are four-year highs.

Student Loan

• The total number of student loans originated January-May 2013 is 4.2 million, a decrease of 9.3% from same time a year ago;

• In that same time, the total balance of new credit is $24.3 billion, an increase of nearly 4% from same time a year ago;

• More than 60% of new student loans in May 2013 were distributed to borrowers between the ages of 24 and 39, a modest decrease from the same period last year; and

• The total amount of write-offs year to date in July 2013 is $11.6 billion, an eight-year high and an increase of more than 58% from same time a year ago.

Home Finance

• The total balance of home finance write-offs year-to-date in July 2013 is $96.3 billion, a decrease of more than 22% from same time a year ago and the lowest since 2007;

• First mortgages in severe delinquency (30-days past due) represent 6.24% of outstanding balances, a decrease of 22% from the same time last year;

• Similarly, the total balance of first mortgages 90-days past due or in foreclosure is less than $310 billion, a five-year low and a decrease of more than 25% from same time a year ago; and

• By loan type, severely delinquent balances (90-days past due or in foreclosure) for home equity revolving ($8.3 billion) and home equity installment ($4.4 billion) in July 2013 are five-year lows.

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 500 million consumers and 81 million businesses worldwide, and uses 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(R) 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.