Balances and Delinquencies Begin to Stabilize Across Many Credit Products

After a period of rapid balance growth, particularly with credit cards and unsecured personal loans, Q3 showed signs growth is slowing, according to the just-released TransUnion Q3 2024 Quarterly Credit Industry Insights Report (CIIR).

While both credit products saw year-over-year (YoY) growth of approximately 15% in the year ending Q3 2023, YoY balance growth for the year ending Q3 2024 was only 6.5% for credit card and 3.3% for unsecured personal loans. 

Balances are growing more slowly than one year prior

“As inflation has returned to more normal levels in recent months, consumers may be less likely to rely on these credit products to make ends meet,” said Michele Raneri, Vice President and Head of US Research and Consulting at TransUnion. “Additionally, lenders in many cases have tightened underwriting standards — which may have resulted in lending to borrowers less likely to grow balances quickly.”

The report also found YoY growth in delinquencies has moderated across most credit products. Credit cards and auto saw slower YoY growth in delinquencies as compared to one year prior, while unsecured personal growth saw a steeper rate of decline. 

Delinquencies are declining (or growing more slowly) across many credit products

To learn more about the latest consumer credit trends, register for the Q3 2024 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: Q3 2024

This quarter, we saw further evidence of a moderation in growth when compared to growth observed between Q3 2021 and Q3 2023. Other insights from the report include:

• YoY growth of credit card balances for Q3 2024 was 6.9%, a sharp decline from the 15% YoY balance growth that occurred between Q3 2022 and Q3 2023
• Average credit card debt per borrower has also slowed relative to prior years, rising only 4.8% YoY in Q3 2024 compared to 11.2% in 2023 and 12.4% in 2022
• The percentage of consumers 90+ days past due (DPD) grew again — from 2.34% in Q3 2023 to 2.43% in Q3 2024, representing a 9 bps increase versus the 40 bps observed last year

Our view: Lower inflation in recent quarters combined with continued wage gains likely enabled consumers to better balance their monthly expenses and incomes. Increased lender discretion also played a role in this slowdown, resulting in a decrease in new credit card originations. The origination decline was most likely a response to the 90-day delinquency number remaining higher than observed in over a decade.

Q3 2024 credit card trends 

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

For more credit card industry information, click here to access episodes of Extra Credit: A Card and Banking Podcast by TransUnion. Click here for a Q3 2024 credit card industry infographic.

Consumer credit trends in the personal loan sector: Q3 2024

In Q3, unsecured personal loans continued to trend in a positive direction as growth in originations accelerated and delinquencies declined, largely due to lenders shifting to lower-risk borrowers.

Other insights from the report include:

• Originations for Q2 2024 (the most recent quarter of data available) stood at 5.4 million, representing YoY growth of 5.4% — which was below Q2 2022’s 6 million but still the second highest Q2 on record
• Super prime originations grew 13.4% YoY, continuing to be the risk segment with the highest growth
• Subprime and near prime had their second quarter in a row of growth after five quarters of YoY decline
• Borrower-level 60+DPD delinquency saw YoY declines for the second consecutive year, down 25 bps to 3.5% in Q3 2024
• Subprime delinquencies fell to 11.9% from 12.9% a year ago, but super prime delinquency ticked up

Our view: The unsecured personal loan market continued to be a bright spot in the consumer lending market. Growth was driven by better subprime performance, even as lenders begin to cautiously open their buy boxes. It’s worth watching to see if this trend continues as lenders return to growth across risk tiers in the new year.

Q3 2024 unsecured personal loan trends

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

Click here for additional unsecured personal loan industry metrics. Click here for a Q3 2024 unsecured personal loan infographic.

Consumer credit trends in the mortgage sector: Q3 2024

After a YoY increase in Q1, mortgage originations were flat YoY in Q2 2024 (the latest quarter for which mortgage origination data is available) despite seeing a 29% seasonal QoQ increase.

Other insights from the report include:

• The refinance market comprised just over 13% of originations in Q2 2024, representing a slight increase in share but very low relative to historical figures
• The Q3 2024 60+ DPD delinquency rate was 1.22%, up 27 bps from Q2 2023’s 0.95%; these rates remained extremely low and were helped by the still strong job market and the fact the majority of mortgage accounts and balances are held by 760+ risk score consumers

Our view: After a long period in which mortgage originations were relatively depressed, in large part due to high interest rates, the Fed recently made a half point rate reduction with the potential for future cuts. The mortgage origination market may begin to see growth. While delinquency rates remained low compared to long-term measures, YoY is worth monitoring.

Q3 2024 mortgage trends 

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

Click here for additional mortgage industry metrics, and click here for a Q3 2024 mortgage industry infographic.

Consumer credit trends in the auto sector: Q3 2024

While affordability remained a challenge, monthly car payments stabilized after a sustained period of escalation.

Other insights from the report include:

• The average monthly new car payment increased by 0.3% to $745 following a two-year period from Q3 2021 through Q3 2023 in which new car prices increased by nearly 5%
• Monthly used car payments saw a YoY decline from $537 to $526
• Originations remained well below historical norms at 1.2 million for Q2 2024 — which was flat YoY
• Leasing accounted for 25% of registrations, up from 17% two years ago
• Delinquencies continued to tick up, with serious delinquency rates (60+ DPD) at 1.6% in Q3 2024

Our view: Despite originations remaining low relative to historical norms, there’s much to be optimistic about. Delinquencies, while still increasing, are growing more slowly. Interest rate declines, along with more normal inventory levels and reduced prices, could provide relief to consumers. Leasing options and the stabilization of monthly payments for new and used cars will play key roles in reducing affordability challenges.

Q3 2024 auto loan trends

¹Note: Originations are viewed one quarter in arrears to account for reporting lag.
²Data from S&P Global MobilityAutoCreditInsight, Q3 2024 data only for months of July and August.

Click here for a Q3 2024 auto industry infographic. To view the Q3 2024 auto report, click here.

For more information about the report, please register for the Q3 2024 Credit Industry Insight Report webinar.

About TransUnion (NYSE: TRU) 

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. 

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