Skip to main content

Number of Consumers With Credit Cards and Personal Loans Reached Record Highs in Q2 2022

Understanding the Consumer Dynamics of Auto Refinance

Lenders continue to offer unsecured personal loans and credit cards to non-prime borrowers who are tapping this new source of credit to cover rising costs tied to inflation and reduced personal savings rates.

In fact, according to TransUnion’s (NYSE: TRU) newly released Q2 2022 Quarterly Credit Industry Insights Report (CIIR), the share of balances for unsecured loans held by subprime borrowers rose from 8.0% in Q2 2021 to 11.8% in Q2 2022, and subprime balance distribution for credit cards rose from 5.3% to 6.9% when comparing the same quarters. And while this new focus on non-prime borrowers has caused a normalization in serious delinquency rates, they remain mostly at or below pre-pandemic levels.

“Consumers are facing several challenges impacting their finances on a day-to-day basis — namely high inflation and rising interest rates. However, these challenges are happening against a backdrop of plentiful employment opportunities and low jobless levels. We see lenders offering more access to credit to non-prime consumers, some of whom are new to credit,” said Michele Raneri, Vice President of US Research and Consulting at TransUnion.

Loan growth and balances rising for credit cards and unsecured personal loans

Key metrics

Q2 2022

Q2 2021

Consumers with access to a credit card

161.6M

153.3M

Average credit card debt per borrower

$5,270

$4,817

Consumers with access to a personal loan

21M

18.7M

Average personal loan debt per borrower

$10,344

$9,079

More positive news

TransUnion Credit Industry Indicator (CII) increased to 119 in Q2 2022, up from 116 the previous quarter and at the same level as Q2 2021. The CII is a quarterly measure of depersonalized and aggregated consumer credit health trends that summarizes movements in credit demand, credit supply, consumer credit behaviors and credit performance metrics over time into a single indicator.

Rising levels for the CII generally indicate an improvement in the overall health of the consumer credit market. The stable CII level in Q2 2022 compared to the prior year period was due to the increases in credit demand and supply as consumers increased their applications for and originations of credit products — particularly cards and personal loans over the past year (somewhat offset by rising YoY delinquencies from the extremely low levels seen in Q2 2021).      

To learn more about the latest consumer credit trends, register for the Q2 2022 Quarterly Credit Industry Insights Report Webinar. Read on for more specific insights about credit cards, personal loans, auto loans and mortgages.

 

Consumer credit trends in the credit card sector: Q2 2022

In Q2, the number of bank-issued credit cards topped 500 million for the first time ever, up from approximately 465 million in Q2 2021 — with significant jumps in both Gen Z and subprime borrowers accessing credit cards:

  • Originations for Gen Z rose 31.7% between Q1 2021 and Q1 2022 
  • Overall originations were up 26.2% in the last year
  • The subprime segment’s total balances grew 51.7% YoY — the highest growth rate ever achieved
  • Average credit lines remained below pre-pandemic levels, except for super prime hitting an all-time high at $12,456
  • Serious delinquency rates (90+ days past due) for borrowers rose to 1.57% but remained slightly below pre-pandemic levels

Our view: The employment picture remains strong, and while increased interest rates and high inflation are placing more pressure on consumers, serious delinquencies (although rising as expected) are nowhere near concerning levels.

Q2 2022 credit card trends 

Credit card lending metric

Q2 2022

Q2 2021

Q2 2020

Q2 2019

Number of credit cards

500M

464.9M

453.6M

439.2M

 Borrower-level delinquency rate (90+ DPD)

1.57%

0.95%

1.49%

1.72%

Average debt per borrower

$5,270

$4,817

$5,223

$5,635

Prior quarter originations*

18.9M

15M

15.5M

15.3M

Average new account credit lines*

$5,035

$3,974

$4,001

$5,295

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

 

Consumer credit trends in the personal loan sector: Q2 2022

Total personal loan balances reached a record $192 billion in Q2 2022, a 31% increase from last year. And total balances nearly doubled for subprime borrowers, up 92%, while balances for super prime borrowers increased just 10%:

  • Originations in Q1 2022 grew 56.5% YoY to 5 million, with all credit risk tiers experiencing at least 20% growth from the previous year
  • Subprime borrowers saw the largest rise in originations at 71.2%
  • Serious borrower delinquency rates (60+ days past due) have now risen four straight quarters as subprime borrowers take a larger share of personal loan accounts
  • The 3.37% delinquency rate for Q2 2022 was up 47% from last year, although it remained below levels seen prior to the pandemic

Our view: In the first half of the year, lenders began cautiously expanding into below prime risk tiers, which has driven the record growth in unsecured personal lending. While that has increased overall delinquency rates, serious delinquencies remain below pre-pandemic levels. As lenders look to continue to grow, a shift to more prime and above consumers is possible as demand is expected to continue due to rising costs from inflation. 

Q2 2022 unsecured personal loan trends

Personal loan metric

Q2 2022

Q2 2021

Q2 2020

Q2 2019

Total balances

$192B

$146B

$153B

$145B

Number of unsecured personal loans

24.9M

20.7 million

22.2 million

21.6M

Number of consumers with unsecured personal loans

21M

18.7M

20M

19.6M

 Borrower-level delinquency rate (60+ DPD)

3.37%

2.28%

3.10%

3.14%

Average debt per borrower

$10,344

$9,079

$8,895

$8,596

Prior quarter originations*

5M

3.2M

3.9M

3.8M

Average balance of new unsecured personal loans*

$8,085

$7,129

$6,631

$6,662

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

 

Consumer credit trends in the auto sector: Q2 2022

Supply chain challenges continued to impact the auto finance market, driving up monthly payments for both new and used vehicles and hurting consumer affordability:

  • Originations in Q1 2021 declined 8.3% from the previous year, though they remained above Q1 2019 levels
  • The cost to finance vehicles remained high as witnessed by a $2,000+ year-over-year increase in average auto loan debt per borrower in Q2 2022
  • Used vehicles helped propel the debt metric with average used vehicle monthly payments rising 22% YoY to $505 in Q1 2022  
  • Serious auto loan delinquencies (60+ days past due) increased 40 basis points between Q2 2021 and Q2 2022, but performance differed for recent vintage loans
  • Loans originated in Q2 and Q3 2020 continued to outperform pre-pandemic vintages, while loans from Q2 and Q3 2021 were beginning to perform on par with them

Our view: Increased costs to consumers may be seen as an opportunity for some lenders, and credit unions could gain market share because they’re offering lower interest rates. Affordability challenges could continue to drive increases in serious auto loan delinquency rates.

Q2 2022 auto loan trends 

Auto lending metric

Q2 2022

Q2 2021

Q2 2020

Q2 2019

Number of auto loans

81.4M

83.2M

83.5M

82.7M

 Borrower-level delinquency rate (60+ DPD)

1.63%

1.23%

1.51%

1.23%

Prior quarter originations*

6.8M

7.4M

6.3M

6.7M

Prior quarter average monthly payment NEW**

$654

$590

$581

$564

Prior quarter average monthly payment used**

$505

$414

$394

$386

Average balance 

of new auto loans*

$28,523

$20,466

$19,397

$18,952

Average debt per borrower 

$22,085

$19,980

$19,256

$18,952

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

**Data from S&P Global MobilityAutoCreditInsight, viewed one quarter in arrears.

Click here for additional auto industry metrics.

 

Consumer credit trends in the mortgage sector: Q2 2022
In 2022, purchase volumes outpaced refinance volumes, up by 18 percentage points from 41.6% in Q1 2021 to 59.8% in Q1 2022 — compared to last year when refinance dominated origination volumes and accounted for 58% of new mortgage loans. In 2022, HELOCs continued a resurgence as home equity continued to grow, hitting an aggregate total of $18.4 trillion in Q1 2022 (latest data available), and was up 22% YoY and 52% over the last five years:

  • Approximately 80 million consumers have available equity in their homes (a median of $223,000), and around 4.5 million homeowners have more than $1 million in available equity
  • HELOC and home equity loan originations increased YoY by 40.6% (the highest volumes booked since the end of 2019) and 29.2%, respectively
  • The slowdown in mortgage originations accelerated in Q1 2022 with purchases dominating originations for the fourth consecutive quarter
  • Purchase volumes decreased from 1.6 million in Q1 2021 to 1.3 million in Q1 2022 (down by 20% YoY), while refinance volumes decreased from 2.3 million in Q1 2021 to 870,000 in Q1 2022 (down by 62% YoY)
  • Approximately 2.2 million total mortgages were originated in Q1 2022, down 44.6% from the previous year
  • Q1 2022 volumes remained above pre-pandemic levels with the average volume of originations between 2010 and 2019 averaging approximately 1.5 million per quarter
  • Serious mortgage loan delinquencies in Q2 2022 remained near record lows and have remained flat since Q2 2021

Our view: As rising interest rates place additional pressure on the housing market — and consumers look to tap historic amounts of home equity — mortgage lenders are now adding home equity lending to their portfolios to counter the declining refinance market. Mortgage lenders looking for growth opportunities can benefit from tools which help them identify how much equity a homeowner has in their property.

Q2 2022 mortgage trends 

Mortgage lending metric

Q2 2022

Q2 2021

Q2 2020

Q2 2019

Number of mortgage loans

51.8M

51.2M

50.7M

50M

Account-level delinquency rate (90+ DPD)

0.58%

0.60%

0.84%

0.94%

Prior quarter originations*

2.2M

3.9M

2.2M

1.2M

Mortgage origination* distribution – purchase 

59.8%

41.6%

50.9%

73.7%

Mortgage origination* distribution – 

refinance

40.2%

58.4%

49.1%

26.3%

Average balance

of new mortgage loans*

$322,631

$298,115

$291,420

$260,182

Number of HELOC originations*

291,736

207,422

243,370

235,722

Number of home equity loan originations*

203,093

157,159

148,727

140,420

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

Click here for additional mortgage industry metrics. 

For more information about the report, please register for the Q2 2022 Credit Industry Insight Report webinar.

 

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.

A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.

http://www.transunion.com/business

Related Insights

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Support Center for assistance.

Contact Us

We're sorry, your request failed. Please try again in a little while.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.