Consumer
credit cards
continued their recovery through the end of September, with a major
reporting agency's data showing new credit originations returning
to levels last seen three years ago. According to Equifax's latest
National Consumer Credit Trends Report, the amount of new credit
card limits opened in the first three quarters of 2012 hit $675
billion, up from just $523 billion during the same period in
2010.
However, the report also indicates that those new limits
represent just under a third of all outstanding balances. In a
statement to reporters, Equifax Chief Economist Amy Crews Cutts
cheered the data as a sign that consumers have used credit cards
responsibly, even as banks loosen some of their underwriting
guidelines.
Although retail credit cards drove most of the gains in 2012,
bank credit cards saw a significantly larger percentage increase
during the past two years. Retailers and their issuing partners
opened up $47.5 billion in new credit for customers through
November 2012, a 17 percent increase from 2010's report. Meanwhile,
with over $132 billion in new credit limits through the end of
September, bank credit cards have jumped 44 percent from the low
point of the recession.
Credit utilization
remains low across most bank credit card accounts, with Equifax
reporting that consumers used just 22 percent of their available
limits. During the same period, year-over-year write-off rates
continued to drop another 20 percent, demonstrating a cultural
shift to using cash and preserving credit. The number of active
credit cards has stabilized among the 300 million mark, however
banks have yet to see a downward swing in the quality of their
portfolios, Equifax analysts reported.
Because originations remain about one third lower than their
pre-recession peak, Cutts suggested that the "consumer-led
recovery" has been working, but that Americans still need more time
to fully regain the ground they lost in 2008's credit crunch.
Equifax officials noted that a new auto loans hit a five-year high
in September, mirroring the improvement economists have seen in
unsecured borrowing.