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Unlike 2019, which was a banner year for many credit card issuers, 2020 proved to be far more tumultuous. COVID-19 caused widespread disruptions, economic uncertainty, and a steep rise in unemployment. Facing economic uncertainty, consumers largely reigned in their credit usage, causing revolving debt volumes to drop. Despite the potential for an economic disaster, however, the credit card industry remains largely stable, with delinquencies down across all loan types.
According to the new report, The 2021 Credit Card Data Book Part One: Internal Dynamics, 2021 will likely end with a manageable rise in charge-offs. Though the credit cycle risk indicators are artificially low and credit use has dropped considerably, current trends make it unlikely that a tsunami of delinquencies and charge-offs will crash over the credit industry in 2021, comments Brian Riley, Director, Credit Advisory Service and co-author