Credit card asset quality will remain strong in 2015, although delinquencies and charge-offs are expected to end the year modestly higher than beginning of year levels. Loan growth and moderate loosening of underwriting standards will contribute to a slow reversion nearer to longer-term averages.
Despite the growth of purchase volumes, consumer leverage, as estimated by the financial obligations ratio (FOR), which measures debt service payments on mortgage debt, auto debt, consumer debt and property taxes as a percentage of disposable personal income, continued to decline, amounting to 15.27% in fourth-quarter 2014. This compares with a peak FOR of 18.09% recorded in fourth-quarter 2007 and a 35-year average of 16.51%. As interest rates rise, and consumers experience higher debt service burdens.
Global discretionary spending intentions declined or remained steady in the first quarter across all lifestyle categories. While confidence across global regions remained relatively stable in the first quarter, there is considerable variation across different markets.
CT-based Galazin Products has unveiled a slim credit card sleeve that covers one lengthwise edge of any standard credit card. The new Slivver not only eliminates the need for users to physically touch germ-covered touch screens which consistently carry high levels of germs and bacteria, the material itself is antimicrobial.
Average losses in the first-quarter 2015 for the top six issuers were 213 basis points (bps) below their 2010-2014 averages and now at an unsustainable level over the long term. Analysts are saying the industry may be approaching the inflection point in credit performance.