Credit score Card Use Is Rising With Inflation, However That is Not A Pink Flag

The strongest indicator of whether or not someone can pay the bills is whether or not they have a job.

Michele Raneri

Vice President of US Research and Consulting at TransUnion

However, experts say that jump use alone is not a sign of trouble.

“I don’t see anything that would really be a red flag,” said Michele Raneri, vice president of U.S. research and consulting at TransUnion.

“Acting is increasing”

Dan Brownsword | Image Source | Getty Images

As the number of credit card accounts in the U.S. increases, more new customers are subprime borrowers, which typically means those with credit scores of 600 or lower, according to TransUnion, due in part to an influx of younger borrowers gaining access to credit cards.

At the same time, “crime is increasing and approaching what it was before the pandemic,” Raneri said. – But that doesn’t necessarily mean it’s bad.

The report found that as lenders expanded access to debt, delinquencies rose but remained close to “normal” levels. TransUnion defines late as a payment that is 60 days or more late.

Employment is the “strongest return indicator.”

“The strongest indicator of whether or not someone can pay the bills is whether they have a job,” says Raneri.

July jobs report showed that despite this, the labor market remains strong other signs of economic weakness. The unemployment rate fell to its lowest level since 1969, and average hourly earnings rose 5.2% for the year.

“Consumers face several challenges that affect their finances on a daily basis, namely high inflation and rising interest rates,” Raneri said. “However, these challenges are taking place in a context where employment opportunities are still plentiful and the unemployment rate remains low.”

As long as “people have jobs,” she added, “they can figure out more every day.”

Subscribe to CNBC on YouTube.

Leave a Comment