Consumers turn to credit cards and loans as costs soar – report
Nov 8 (Reuters) – More consumers switched to credit cards and unsecured loans in the third quarter compared to a year earlier amid decades-high inflation, according to a report by the company on Tuesday TransUnion Global Credit Rating (TRU.N).
While delinquencies for most credit products are tracking pre-pandemic levels, they have increased from levels seen in 2021, the quarterly Credit Industry Insights Report (CIIR) added.
The outlook for consumer credit quality has been clouded in recent months amid deteriorating macroeconomic conditions, fueled by fears of an impending recession as central banks around the world rush to tighten monetary policy.
Most consumer-facing U.S. banks, including JPMorgan Chase & Co (JPM.N) and Bank of America (BAC.N) as well as credit card giant American Express (AXP.N), have built up funds bad weather in the third quarter for loans that could potentially deteriorate as consumers begin to feel the pinch of the economic slowdown.
According to the report, credit card balances continue to grow, with bank card balances hitting a record high of $866 billion in the third quarter, driven primarily by Gen Z and millennial borrowers.
Reporting by Manya Saini in Bangalore; Editing by Vinay Dwivedi
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