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Credit Card Balances See First Year-over-year Hike Since 2008
ATLANTA (8/30/13)--The total balance of credit cards increased in the year ending in July to $533.6 billion from $533.3 billion, the first year-over-year increase in five years, according to Equifax's latest National Consumer Trends Report.

"Only two major consumer credit segments are currently growing: auto financing and student loans," said Equifax Chief Economist Amy Crews Cutts. "In all other segments, consumers are reducing their debt burdens, either negatively, through foreclosures and bankruptcies, or positively, through payoffs--payoffs are dominating in most cases today.
 
"We expect mortgage balances to begin rising again over the next several months as new home purchase loans overtake foreclosures and payoffs," she said.
Other year-over-year changes in balances include:
  • Student loans increased 11.3%, to $884.2 billion from $794.6 billion;
  • Auto loans rose 10.9%, to $826.8 billion from $745.3 billion;
  • First mortgages decreased 0.9%, to $7.72 trillion from $7.79 trillion;
  • Home-equity installment loans declined 4.1%, to $136.5 billion from $142.3 billion; and
  • Home-equity revolving debt dropped 8.9%, to $504.1 billion from $553.2 billion.
Other highlights from the data include:
 
Credit cards:
  • Serious delinquencies represent 1.86% of outstanding balances in July 2013, a decrease of more than 11% year-over-year;
  • Total new credit opened from January to May is the highest since 2008 and an increase of more than 6% from same time a year ago, to $77.7 billion $72.9 billion;
  • From January to May, the total number of new loans also rose more than 6% from the same time a year ago, to 16.6 million from 15.6 million; and
  • Both new loans and new credit year-to-date in May are four-year highs.
Student loans:
  • Total student loans originated from January to May is 4.2 million, a decrease of 9.3% from same time a year ago;
  • From January to May, new credit totaled $24.3 billion, an increase of nearly 4% from same time a year ago;
  • More than 60% of new student loans in May were distributed to borrowers between the ages of 24 and 39, a modest decrease from the same period last year; and
  • Write-offs year-to date in July totaled $11.6 billion, an eight-year high and an increase of more than 58% from a year ago.
Home Finance:
  • The total balance of home finance write-offs year-to-date in July is $96.3 billion, a decrease of more than 22% from same time a year earlier and the lowest since 2007;
  • First mortgages in severe delinquency (30-days past due) represent 6.24% of outstanding balances, a decrease of 22% from the same time last year;
  • Similarly, the total balance of first mortgages 90-days past due or in foreclosure is less than $310 billion, a five-year low and a decrease of more than 25% from same time a year ago; and
  • By loan type, severely delinquent balances (90-days past due or in foreclosure) for home-equity revolving ($8.3 billion) and home equity installment ($4.4 billion) in July 2013 are five-year lows.


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