Balances up 5 percent yearly
Consumer credit card balances rose on both a monthly and yearly basis in the third quarter (Q3) of 2012, TransUnion revealed in a recent report.
According to TransUnion, average credit card debt came in at $4,996 in Q3, up from $4,762 a year earlier in Q3 2011 – a 4.91 percent increase.
The $4,996 mark for credit card balances from Q3 is also a 0.50 percent increase from the previous quarter – the second quarter (Q2) of 2012.
More new credit cards in Q2
The number of new credit card accounts, which is analyzed one quarter behind to account for reporting delays, increased 3.14 percent in Q2 2012 on a year-over-year basis.
In addition, higher-risk applicants received a higher share of new approvals. Non-prime credit card originations totaled 29.55 percent of all new credit card accounts in Q2 2012.
This is an increase from the 29.28 percent share observed a year earlier in Q2 2011. Two years earlier – in Q2 2010 – non-prime borrowers accounted for 23.86 percent of new credit card originations.
“Non-prime borrowers continue to gain more access to credit,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, said in a statement.
New credit cards accounts have been originating with more frequency in recent years, Becker said, and non-prime borrowers have not been left behind.
“In conjunction with the growth in the overall number of card originations in the last few years, it means that the credit card pie is bigger, and non-prime consumers are getting a bigger slice of that pie,” he said.