Click to view our Accessibility Statement or contact us with accessibility-related questions
Contact Us

Credit Card Balances Hit a New Low: What That Means for the Holiday Shopping Season

Matt Komos
Blog Post11/25/2020
Business Research
Credit Card Balances Hit a New Low: What That Means for the Holiday Shopping Season

TransUnion’s quarterly Industry Insights Report provides insight on consumer credit trends in Q3

To make the upcoming holiday season merry and bright, will consumers start using their credit cards again? It may be too early to tell.

As reported in our just-released Q3 2020 Industry Insights Report, since the pandemic started average consumer-level credit card balances have declined across all credit risk tiers from $5,668 in Q3 2019 to $5,075 as of Q3 2020. Total bankcard balances also fell to $723 billion, a decline of more than 10% year over year and the lowest level since Q2 2017. 

That bucks a three-year trend. Between the third quarters of 2017–2019, consumers consistently increased the balances of their private label and general purpose credit cards, and those increases continued during the fourth quarter holiday shopping season.

Declining credit card balances in recent quarters may point to more of the same this holiday season


Q4 credit card balance (billion)

Q3 credit card balance (billion)

Q2 credit card balance (billion)

















“Credit card balances have been severely impacted by the COVID-19 pandemic as consumers have slowed purchases, especially on travel and entertainment. With fewer people using their credit cards to buy airline tickets or spend money on vacations, it’s understandable to see such a precipitous drop in balances,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. “However, we do see some positives as consumers have used their credit cards to spend more on home-related purchases. There is also a belief that with the immense slowdown in balance growth during the last few quarters, we may see increased credit usage this fourth quarter as some consumers may be positioned to make more purchases this holiday season.”

Still, consumers don’t seem eager to pull out the plastic just yet. According to a TransUnion study in late October, 54% of respondents said they have been financially impacted by the pandemic and half of those impacted plan to decrease retail spending over the next three months.

Ultimately, this holiday season could serve as a litmus test to determine if consumers are ready to turn the corner on spending or continue to reign in their credit card use.

Evaluating the quarter as a whole

To see all the Q3 data relating to the state of personal, auto and mortgage loans, download the Q3 2020 Industry Insights Report, but here is a snapshot of some of the findings:

Consumer Credit Trends in the credit card sector: Q3 2020

The pandemic has had a profound impact on the credit card market in both the bankcard and private label sectors. Findings from the study:

  • Consumer level serious delinquencies (90+ DPD) has fallen for three straight quarters to 1.22% in Q3 2020, following a peak in Q4 2019
  • Originations declined 48.3% year-over-year in Q2 2020 to 8.6 million across all risk tiers
  • New account lines hit their lowest level in 10 years at $32 billion
  • The average new account credit line decreased 25.2% to $3,952, down from $5,284 a year prior in Q3 2019

Q3 2020 credit card trends 

Credit card lending metric

Q3 2020

Q3 2019

Q3 2018

Q3 2017

Number of credit cards

449.8 million

439.9 million

425.1 million

414.3 million

 Borrower-level delinquency rate (90+ DPD)





Average debt per borrower





Prior quarter originations*

8.6 million

16.6 million

15.8 million

15.5 million

Average new account credit lines*





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

Our view: Despite a significant reduction in originations, credit lines and card balances, performance has remained steady, largely because payment accommodation programs, lower spending and an increase in payments has driven a drop in delinquencies. Despite the reduction in originations, the number of consumers with access to a credit card continued to set a record at 186 million.

Consumer credit trends in the auto sector: Q3 2020

Following Q2 trends — when lenders began tightening their lending criteria across all risk tiers — the auto market saw further decline in Q3. Findings from the study:

  • Loan originations declined 11.9% year-over-year across all tiers
  • Subprime consumers declined 28.1% over the same period last year
  • Approximately 3.8 million auto accounts were in some form of accommodation at the end of September, although that number is declining

Q3 2020 auto loan trends 

Auto lending metric

Q3 2020

Q3 2019

Q3 2018

Q3 2017

Number of auto loans

83.7 million

83.4 million

81.9 million

78.6 million

 Borrower-level delinquency rate (60+ DPD)





Average debt per borrower





Prior quarter originations*

6.5 million

7.3 million

7.3 million

7.1 million

Average balance 

of new auto loans*





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

Our view: Performance has largely held steady and we expect originations to improve as the auto market moves past the large-scale shutdowns that contributed to dealership closures. However, as economic stimulus funds evaporate and consumers exit accommodation programs, we may see an impact on future delinquencies.

Consumer credit trends in personal loan: Q3 2020

In Q2, the first full quarter of the COVID pandemic, originations declined 46.2% year over year as lenders temporarily exited the market, tightened underwriting or shifted their portfolio mix toward lower risk consumers, and that trend continued through Q3. Findings from the study:

  • Total balances in the consumer lending industry declined to $151 billion in Q3 2020, down from $156 billion in Q3 2019, following a dramatic drop off in originations
  • Performance has remained stable as serious delinquencies improved to a 10-year low of 2.53% in Q3 2020
  • Delinquencies were down across all risk tiers, except for super prime, which remained low, but ticked up to 0.03% from 0.02% in Q2

Q3 2020 unsecured personal loan trends 

Personal loan metric

Q3 2020

Q3 2019

Q3 2018

Q3 2017

Total balances

$151 billion

$156 billion

$132 billion

$112 billion

Number of unsecured personal loans

21.4 million

22.5 million

20.3 million

17.5 million

Number of consumers with unsecured personal loans

19.4 million

20.2 million

18.5 million

16.4 million

 Borrower-level delinquency rate (60+ DPD)





Average debt per borrower





Prior quarter originations*

2.6 million

4.8 million

4.5 million

3.6 million

Average balance of new unsecured personal loans*





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

Our view: Lender pullback and decreased consumer demand caused a near 50% decline in originations last quarter, and we saw total balances contract for the first time since early 2012. However, we expect lenders to ramp up originations in Q4 for the holiday season as investor demand returns to the sector.

Consumer credit trends in the mortgage sector: Q3 2020

Due to low interest rates, we’ve seen an uptick in mortgage originations, largely due to substantial refinance origination growth over the past quarter. Findings from the study:

  • Mortgage originations increased to 3.3 million in Q2 2020, a 76% increase over the 1.9 million in Q2 2019
  • Refinance originations increased 256% over last year
  • Rate and term refinance originations grew at a rate of 444%, while cash out refinance originations grew 113% year over year
  • Purchase originations grew at a slower rate of 5% year over year.
  • 15- and 20-year loans grew 62% and 57%, respectively, outpacing the growth of 30-year loans, which experienced no growth this quarter
  • Shorter loan terms outpaced the growth of 30-year loans, with 15-year purchase loans increasing from 6% to 9% year over year and 20-year purchase loans increasing from 2% to 3%, while the market share for traditional 30-year loan declined from 87% to 83% over the same time 

 Q3 2020 mortgage trends 

Mortgage lending metric

Q3 2020

Q3 2019

Q3 2018

Q3 2017

Number of mortgage loans

50.5 million

50.1 million

49.7 million

49.4 million

 Account-level delinquency rate (90+ DPD)





Prior quarter originations*

3.3 million

1.9 million

1.7 million

1.7 million

Average balance

of new mortgage loans*





 Borrower-level delinquency rate (90+ DPD)





Average debt per borrower





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

Our take: Despite the economic uncertainties presented by COVID-19, purchase originations have remained strong with some consumers exploring shorter term loan options. As refinance volumes are likely to decline in 2021, lenders may find opportunities for origination volume growth on the purchase market side, particularly with first-time home buyers.

To receive more insights on consumer credit trends, register for the TransUnion’s Q3 2020 and 2021 Forecast webinar.

Contact us

* Required field