TransUnion: Credit card delinquencies could reach 10-year high in 2020

Dec. 12 (UPI) -- Credit card delinquencies past 90 days are expected to reach a 10-year high next year, but the projected total is still less than the last recession, according to new forecast unveiled by TransUnion on Thursday.

The 90-day-plus accounts are predicted to increase to 2.01 percent in 2020, and the number of people with revolving credit reached a record of 200.5 million in the third quarter of this year.

"This is well-managed delinquency," Matt Komos, TransUnion's vice president of research and consulting, said. "It's still healthy. This uptick is not concerning with the amount that credit has been expanding."

The TransUnion forecast said that even with the slight uptick in delinquencies, consumer balances are expected to grow next year, up 4 percent to $854 billion by the end of 2020.

"Originations in the credit card market are expected to slow in 2020, with the majority of growth coming from the non-prime risk tiers," Paul Siegfried, senior vice president and TransUnion's credit card line of business leader, said in a statement.

"We anticipate that the credit card market will be well-positioned from both a performance and growth standpoint as card issuers balance risk across their portfolios," he added.

In other forecasts, TransUnion said it expects the unsecured personal loans market to level off in 2020 after growing 8.4 percent in the first quarter of 2019. Auto loan balances are expected to only grow 1.6 percent next year as consumers grow more concerned about the affordability of those vehicles.

"External pressures such as higher gas prices and the looming threat of auto tariffs, combined with rising vehicle prices, are all contributing to the concern of auto affordability," Satyan Merchant, a senior vice president with TransUnion's auto line, said.

"Despite these headwinds, loan performance in the auto industry remains strong. We expect the auto delinquency rate to decrease at a higher rate on a year-over-year basis during the first half of 2020, and serious delinquencies are expected to slightly decline by the end of next year," Merchant added.