Credit Card Balances Continue to Grow as Consumer Confidence Rises
Consumer borrowing on credit cards continues its monthly upward trend, according to the Equifax National Consumer Credit Trends Report. The report also found that more people are using credit cards and borrowing money than they did the last month, last quarter and last year, covered in the report.
Bank-issued credit card balances at their highest level in almost five years
The figures in the report show that total bank credit card balances increased by 2.2 percent during quarter two of 2014. With a 2.6 percent annual increase, the total balance is higher than it was a year ago. And at 15.5 million, the total number of new credit cards issued during the first quarter of 2014 is the highest it’s been in six years. This is a gain of slightly over 17 percent more than the number of new cards issued at the same time last year.
It isn’t just credit card balances that are showing a steady increase, either. The total figure of new credit opened during the same time period is also up. At $77.4 billion, this figure represents the highest balance in six years, and a year-over-year gain of 24.1 percent.
Credit card delinquencies show steady decline
While credit card borrowing and the number of new cards issued has increased, delinquency figures show a steady, year-over-year decrease. The report figures reveal that the number of accounts that are 60 or more days overdue (not including accounts that have been written off) is just 1.6 percent of total loans. This is a decrease of 11.7 percent since last year — and the lowest delinquency figure in five years.
Consumer spending and confidence growing nationwide
These recently reported numbers correspond to the latest facts and figures from the Federal Reserve’s Beige Book report of July 16, 2014, which provides a brief summary of current economic conditions. According to the report, local economies are enjoying moderate to modest growth, while consumer spending and retail sales have increased in every district across the country.
Significantly more people are applying for — and getting — more credit cards and carrying larger balances than last year, while delinquencies are declining. At the same time, consumer spending and consumer confidence is growing steadily across the board.
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