Total outstanding balances of bank and retail-issued cards and home finance increased in January for the third consecutive month, the first time that has happened in more than three years, according to the latest Equifax National Consumer Credit Trends Report.
The total outstanding balances in January for bank-issued credit cards reached $555.4 billion for bank-issued credit cards; $62.2 billion for retail-issued credit cards; and $8.59 trillion for home finance.
"Home purchase transactions, in which first time homebuyers take on entirely new mortgage debt and move up buyers increase their existing mortgage debt, have finally overtaken foreclosures and accelerating pay-downs, resulting in increases home finance balances," said Amy Crews Cutts, chief economist at Equifax. "American consumers have shed more than $1.5 trillion in mortgage debt since the start of the financial crisis and only now seem interested in investing in housing again."
Consumers also have reduced their credit card debt, shedding $176 billion in balances on retail credit cards and general purpose bank cards.
"Balances on retail cards have been trending up for some time now while bank card balances have continued trending down, perhaps because consumers want to compartmentalize large purchases or take advantage of special deals tied to cards offered by retailers," said Crews Cutts.
Other highlights from the latest Equifax data include:
Bank-issued Credit Card:
-- The total number of loans outstanding is more than 315 million, the highest since October 2009;
-- The total limit of new bank card credit originated January-November 2013 is $184.4, a five-year high and an increase of 12.5 percent from same time a year ago;
-- Similarly, the total number of new card accounts issued in that same time is 39.6 million, also a five-year high and an increase of 9.5 percent from same time a year ago;
-- Additionally, write-offs on bank card accounts have decreased 14.4 percent (from 4.49 percent to 3.85 percent of balances).
Retail-issued Credit Card:
-- The total number of loans outstanding is more than 190 million, a 53-month high;
-- The total limit of new retail card credit originated from January-November 2013 is $67.2 billion, a five-year high and increase of more than 10 percent from same time a year ago;
-- Similarly, the total number of new retail card accounts issued in that same time is 35.9 million, the highest since 2007 and an 8.9 percent increase from the same time a year ago.
-- The total balance of home finance write-off balances in 2013 ($149.7 billion) is a six-year low and a decrease of more than 30 percent from 2012 totals;
-- From January 2013-14, first mortgage balances increased 2.5 percent, from $7.7 billion to $7.9 billion, the largest year-over-year increase in more than 36 months;
-- In that same time, total home equity balances fell more than 6 percent, from $664.3 billion to $622.3 billion;
-- From January 2013-2014, first mortgage delinquencies (30-or-more days past due or in foreclosure) decreased 22.8 percent;
-- In that same time, home equity installment delinquencies decreased 22 percent, while home equity revolving delinquencies decreased 10.6 percent.