New credit activity grew, despite overall consumer sentiment indicating a cutback on spend. Credit card origination volumes—the measure for new accounts opened—increased by 37.9% YoY in Q1, in stark contrast to the 42.7% YoY decrease in originations seen at the same point in 2021, the group said.
The volume of credit card originations has steadily grown since its low in Q3 2020, indicative of increased lender appetite for growth as well as higher consumer demand for credit, TransUnion said.
“However, despite the resurgence in card originations current volumes remain below pre-pandemic levels.”
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From an age perspective, 74% of all card originations came from Gen Z and Millennial consumers, indicating higher demand for credit from younger consumers and a willingness by lenders to extend credit to these borrowers.
From a risk distribution perspective, consumers with credit scores below 656 (below prime) were responsible for 66.1% of all originations for the quarter. Gen Z (born 1995-2010) and Millennials (born 1980-1994) accounted for 64% of new businesses.
