TransUnion 2025 Consumer Credit Forecast Points to Moderating Credit Card Balance Growth and Slower Delinquency Gains
Rhea-AI Summary
TransUnion's 2025 Consumer Credit Forecast projects a slowdown in the growth of both credit card balances and delinquencies by the end of 2025. Following four years of increases, credit card balances are expected to rise to $1.1 trillion by the end of 2025, a YoY increase of 4.4%, significantly lower than the 18.5% and 12.6% growth in 2022 and 2023. The number of active credit cards has increased to 554.5 million in Q3 2024, up from 451.6 million in Q3 2020. Despite these increases, balances among non-prime borrowers are forecasted to grow at slower rates in 2024 and 2025 compared to the previous two years.
Serious credit card delinquency rates (90+ DPD) are anticipated to rise to 2.76% in 2025, a 12 bps YoY increase, but still lower than the increases observed in 2022 and 2023. Other credit products like auto loans, unsecured personal loans, and mortgages show mixed delinquency trends, with auto loan delinquencies expected to decline slightly in Q4 2025, and unsecured personal loan and mortgage delinquencies remaining relatively stable.
TransUnion's projections are based on various economic factors and could change if there are unanticipated economic shocks.
Positive
- Credit card balances expected to grow to $1.1 trillion by end of 2025, a YoY increase of 4.4%.
- Serious credit card delinquency rates (90+ DPD) to rise only by 12 bps in 2025, indicating slower growth in delinquencies.
- Auto loan delinquencies expected to decline slightly in Q4 2025.
Negative
- Credit card balances among non-prime borrowers to grow at slower rates in 2024 and 2025 compared to previous years.
News Market Reaction 1 Alert
On the day this news was published, TRU gained 3.53%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
TransUnion projects delinquency expectations for major credit products during the next year
CHICAGO, Dec. 11, 2024 (GLOBE NEWSWIRE) -- 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
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
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) | $1,088.8 | $1,136.3 | |||||
| YoY % Change | - | 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
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) | 2.64% | 2.76% | |||||
| YoY Change | 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,
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 | 1.45% | 1.38% | |||||
| Unsecured Personal Loans | 3.87% | 4.00% | |||||
| Mortgage | 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 | |
| david.blumberg@transunion.com | |
| Telephone | 312-972-6646 |
FAQ
What is the projected growth rate for TRU credit card balances by the end of 2025?
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What is the forecast for TRU auto loan delinquencies in Q4 2025?
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