TRU TransUnion

Following four years of increases in credit card balances and delinquencies, a new TransUnion (NYSE: TRU) consumer credit forecast projects a slowdown in growth for both metrics by the end of 2025. TransUnion’s forecast also examined the state of delinquency in 2025 for auto loans, unsecured personal loans and mortgages.

The forecast highlights the outlook for credit cards as this credit product is by far the most widely used in the U.S. In Q3 2024 (latest data available), there were 554.5 million active credit cards held by U.S. consumers. In the last four years alone, the number of credit cards increased by more than 100 million (451.6 million in Q3 2020).

“We’ve observed widespread growth in credit cards in recent years for myriad reasons. Notably, credit card issuers felt comfortable taking on more risk, while consumer appetite for credit rose in tandem with higher costs for everyday goods and services,” said Paul Siegfried, senior vice president and credit card business leader at TransUnion. “As inflation pressures dissipate and interest rates continue their slow decline, we believe there will also be a slowing in both credit card balance growth and serious delinquency rates.”

TransUnion projects credit card balances to increase to $1.09 trillion by the end of 2024, representing a year-over-year (YoY) increase of 3.9%. A similar YoY rise of 4.4% to $1.1 trillion is expected at the close of 2025. These expected increases are well below the YoY growth seen in 2022 and 2023 of 18.5% and 12.6%, respectively.

Balances among non-prime credit card borrowers, those borrowers with VantageScore 4.0 scores of 660 or below, are forecast to grow at a slower rate than in recent years. Among non-prime borrowers, balances are expected to grow by 4% YoY in 2024 and 8% in 2025 after growing by 39% and 21% in 2022 and 2023.

After Double Digit Growth in 2022 and 2023, Card Balances Are Expected to Grow More Slowly

Metric/Year	2019	2020	2021	2022	2023	2024*	2025*
Year-End Balances ($B)	$846.5	$740.3	$785.2	$930.6	$1,047.9	$1,088.8	$1,136.3
YoY %Change	5.7%	-12.5%	6.1%	18.5%	12.6%	3.9%	4.4%

*Forecasted

Serious credit card delinquency rates of 90 or more days past due (90+ DPD) are expected to increase for the fifth consecutive year in 2025 to 2.76%. The expected 12 basis point (bps) YoY rise will follow an anticipated YoY rise of 5 bps in 2024 but is much lower than what was observed in 2022 (+78 bps) and 2023 (+33 bps).

Card Delinquencies Are Forecast to Grow More Slowly in the Coming Year

Metric/Year	2019	2020	2021	2022	2023	2024*	2025*
Year-End DQ Rate (90+ DPD)	2.19%	1.30%	1.48%	2.26%	2.59%	2.64%	2.76%
YoYChange	25 bps	-89 bps	18 bps	78 bps	33 bps	5 bps	12 bps

*Forecasted

“The growth in total credit card balances is expected to be driven by gradual increases in prices and in consumer spending, along with slower increases in personal savings,” said Michele Raneri, vice president and head of U.S. research and consulting at TransUnion. “We are forecasting credit card balance increases more in line with the single-digit growth observed in pre-pandemic years. This slowing growth and the overall stabilization of the economy offers optimism that we may be nearing a tipping point when it comes to the increases in serious delinquency rates over the past several years.”

This projected slower balance growth comes as more consumers appear confident about the state of their household budgets. According to TransUnion’s recently released Q4 2024 Consumer Pulse study, 63% of consumers indicated that their household finances were as planned or better than expected in Q4 2024. This is up from 60% one year prior.

Mixed Outlook for Delinquency Among Other Credit Products, but Potential for Optimism

Among other lending categories, delinquencies are, for the most part, leveling off as the macroeconomic picture improves and consumers gradually find themselves in more favorable financial positions.

• Auto loan delinquencies are expected to stabilize in Q4 2024 and see a decline in Q4 2025 following two consecutive years of growth. Serious delinquency rates of 60 or more days past due (60+ DPD) are forecasted to remain flat YoY in Q4 2024 before a slight decline of 7 bps in Q4 2025.
• After seeing a decline of 24 bps in Q4 2023, serious unsecured personal loan delinquency rates (60+ DPD) are expected to remain relatively flat in Q4 2024 (-3 bps) and see a small uptick in Q4 2025 (+13 bps). A key element of this increase is likely lenders expanding their buy boxes to riskier borrowers as the economy continues to stabilize.
• Despite three consecutive YoY increases (among them a forecasted increase of 15 bps in Q4 2024), 60+ DPD mortgage delinquency rates remain extremely low relative to historical norms and are expected to remain flat in Q4 2025 (-1 bps).

Serious Delinquency Rates Are Not Expected to See Significant Growth

Credit Product/Year-End DQ Rate	2019	2020	2021	2022	2023	2024*	2025*
Auto Loans	1.29%	0.95%	0.92%	1.26%	1.42%	1.45%	1.38%
Unsecured Personal Loans	3.48%	2.70%	3.00%	4.14%	3.90%	3.87%	4.00%
Mortgage	1.63%	1.03%	0.82%	0.96%	1.11%	1.26%	1.25%

*Forecasted

“One common thread that we see across lending categories is moderation in serious delinquency, likely driven by a stabilizing economy,” said Jason Laky, executive vice president and head of financial services at TransUnion. “Consumers are returning to a financial equilibrium, increasingly finding the room needed in their monthly budgets to make on-time payments and avoid falling behind. Economic conditions are forecast to continue to gradually improve in 2025. As lenders look for loan growth next year, they should use all of the tools at their disposal to make the best possible lending decisions.”

TransUnion’s forecasts are based on various economic assumptions, such as expected consumer spending, disposable personal income, home prices, inflation, interest rates, real GDP growth rates and unemployment rates, among other metrics. The forecasts could change if there are unanticipated shocks to the economy. Better-than-expected improvements in the economy, such as potential increases in GDP and disposable income, could also impact these forecasts.

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For tips on how utilization rate, payment history and other factors can impact consumers’ credit, visit TransUnion’s blog on how to use a credit card responsibly.

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.

http://www.transunion.com/business

Contact	Dave Blumberg
	TransUnion
E-mail	david.blumberg@transunion.com
Telephone	312-972-6646