Core Insights - The latest credit card data from FICO for September 2025 indicates that households are facing financial challenges, with signs of increased delinquency among cardholders with accumulated debt [1][2] - There is a notable decline in average credit card spending, reflecting subdued consumer confidence [3][9] Spending and Balances - Average UK credit card spend in September 2025 was £805, marking a 3.8% year-on-year decline, the most significant drop in recent months [3][9] - Average active balances increased to £1,915, which is 4.5% higher than September 2024, indicating ongoing financial pressure on households [4][9] Payment Trends - The percentage of total balance paid fell to 34.6%, a decrease of 6.5% year-on-year, suggesting that customers are struggling to pay down their balances [4][9][10] - Payments to balance saw a slight increase of 1% month-on-month, but remain significantly lower than the previous year [4][10] Delinquency Rates - There has been a 3.7% month-on-month increase in customers missing three payments, which is also 1.7% higher than September 2024, indicating a trend towards deeper delinquency [5][9][10] - Customers who have held their credit cards for five years or more exhibit the highest delinquent balances, with their delinquent balance being twice as high compared to their overall balance [6][7] Key Metrics Summary - Key metrics for September 2025 include: - Average credit card spend: £805, down 3.8% year-on-year [8][9] - Average card balance: £1,915, up 4.5% year-on-year [8][9] - Percentage of customers missing three payments: 0.21%, up 3.7% month-on-month [10] - Average credit limit: £5,900, up 2.5% year-on-year [10]

Core Insights - The TransUnion Q3 2025 Credit Industry Insights Report reveals a significant divide in consumer credit risk among U.S. consumers, with some showing increased financial resilience while others face growing challenges [1] Consumer Credit Risk Trends - The percentage of individuals classified in the lowest risk super prime credit risk tier has increased from 37.1% in Q3 2019 to 40.9% in Q3 2025 [1] - The total number of super prime borrowers has risen by approximately 16 million since 2019, indicating continued financial stability among top-tier consumers [1] - The subprime segment has returned to pre-pandemic levels after declines in 2020 and 2021, as many consumers paid down debt and reduced delinquencies during the pandemic [1] Lending Market Dynamics - Year-over-year growth in new account originations and total balances has been strongest in the super prime and subprime tiers, significantly outpacing other segments [1] - The divergence in credit behavior highlights evolving consumer dynamics and the need for tailored risk strategies across the credit spectrum [1] Strategic Recommendations - Lenders are advised to leverage advanced tools, such as access to trended data, to better assess evolving risk profiles as consumer behavior shifts toward extremes in the credit risk spectrum [1]

Core Insights - The recent Q3 2025 Credit Industry Insights Report from TransUnion indicates a growing divide in consumer credit risk, with some consumers showing financial resilience while others face challenges [1][5]. Consumer Credit Risk Trends - The percentage of individuals classified in the super prime credit risk tier has increased from 37.1% in Q3 2019 to 40.9% in Q3 2025, reflecting a total of approximately 16 million more super prime borrowers since 2019 [2][3]. - The subprime segment has returned to pre-pandemic levels after declines in 2020 and 2021, indicating a recovery in consumer financial health [2][5]. Credit Market Dynamics - The growth in super prime and subprime tiers is evident in credit card and auto lending markets, with year-over-year growth in new account originations and total balances being strongest in these segments [5][6]. - The credit card industry saw origination volumes rise for the third consecutive quarter, with a 9% year-over-year increase in Q2 2025, driven by super prime and subprime segments [9][12]. Credit Card Market Summary - As of Q3 2025, the total number of credit cards reached 574.4 million, with total credit card balances at $1.11 trillion and an average debt per borrower of $6,523 [10]. - Delinquency rates improved to 2.37%, down from 2.43% in Q3 2024, indicating healthier consumer credit behavior [10][12]. Unsecured Personal Loans - Unsecured personal loan originations reached 6.9 million in Q2 2025, marking a 26% year-over-year increase, with fintechs accounting for over 40% of these new loans [13][15]. - Total balances for unsecured personal loans hit a record $269 billion in Q3 2025, an 8% year-over-year increase [14][16]. Mortgage Market Trends - Mortgage originations increased by 8.8% year-over-year in Q2 2025, primarily driven by rate and term refinancing, which rose 101% year-over-year [20]. - The consumer-level delinquency rate for mortgages increased to 1.36% in Q3 2025, up from 1.24% a year prior, with FHA loans comprising the largest share of these delinquencies [21]. Auto Lending Insights - Auto loan originations rose 5.2% year-over-year to 6.7 million in Q3 2025, supported by Federal Reserve rate cuts [25]. - The average monthly payment for new vehicles increased to $769, while the delinquency rate for auto loans rose to 1.45% [24][26].

Economic Overview - The U.S. economy appears solid with a tech investment boom boosting the stock market and the unemployment rate near historic lows [1] - The federal government shutdown has halted the release of key economic data, leaving policymakers and investors without essential information [1] Alternative Recession Indicators - Unofficial signals are emerging as alternative recession indicators, reflecting consumer behavior and financial health [2] - Missed car payments are highlighted as a significant indicator of U.S. household finances [3] Auto Loan Delinquencies - The rate of delinquent subprime car loans, overdue by 60 days or more, reached a record high of 6.5% in January and remains near that level [4] - Rising repossessions and delinquencies are classic early warning signs of broader credit defaults [4] Consumer Financial Health - There are signs of stress among subprime borrowers, young individuals, and low-income households, although the overall consumer picture is not yet dire [5] - Recent bankruptcies of auto lender Tricolor Holdings and car-parts maker First Brands have raised concerns about the financial health of lower-income borrowers [5] Credit Market Concerns - Goldman Sachs president John Waldron indicated that increased lending could lead to problems if consumer capabilities weaken, potentially affecting credit markets [6] Fundraising Trends - An increase in GoFundMe campaigns for everyday expenses, categorized as "essentials," suggests that households are struggling with basic costs [6] - Consumer prices rose by 2.9% year-on-year in August, with rents, groceries, and childcare remaining more expensive than pre-pandemic levels [7]