New consumer credit demand 'appears to be rising,' survey findsBusiness | 10 Jun 2021 6:58 pm
Almost all of the major consumer lending categories reported strong credit inquiries – a measure of demand – with mortgages recording the largest increase, up 25.1 percent year-on-year in the first quarter, a report by TransUnion showed.
Credit cards also showed strong growth, up by 8.3 percent year on year.
The only category to drop was unsecured revolving lines, continuing from previous quarters. This is likely a function of relatively higher interest rates for revolving lines when compared with other products and this product’s use for discretionary spending, which has generally dropped.
While consumer demand for new credit appears to be increasing, this is not yet reflected in higher reported new account openings.
Growth in total credit card balances, although still negative compared with the previous year, has rebounded faster for younger generations – led by Millennials, born between 1980 and 1994. The Millennial generation, which represents an increasingly larger proportion of credit-active consumers (29 percent), recorded a 0.8 percent yearly decline in overall card balances in the first quarter, against an overall fall of 7.6 percent across the credit-active population.