As 2012 comes to a close and credit card companies look to 2013, the makeup of the average credit card offer is changing. This year, credit card solicitations were up heavily with marked increases in the number of credit cards offered to subprime customers.
TransUnion released its own projections for 2013, noting that it expected credit card debt to rise again to 2009 levels. It also expects that 90-day delinquencies will rise from lows not seen since nearly two decades ago. Credit card delinquencies are currently at their lowest level since 1994.
Credit card originations are up solidly for several years in a row driven by a banking industry eager to lend and a consumer interested in the best possible credit cards. Nonprime borrowers are making up a growing percentage of the card market as banks become less risk adverse given their monstrous reserves that are sitting idle not currently being lent out. TransUnion data points to the fact that borrowers with VantageScores of less than 700 make up roughly 30% of all new credit issued.
Credit card debt per borrower may also rise. The reporting bureau said it expects borrowers to increase their credit card debt to $5,050 per borrower by the end of 2012 and then add another 8% in debt to rise even higher by the end of 2013. Holiday spending accounts for much of the explosion in credit card debt as consumers spend in the fourth quarter only to later pay off their debts in the following few months. In a recent survey, nearly one out of four borrowers admitted that they will take more than three months to repay spending during the holiday season.