Credit card delinquencies rise even as retail credit growth moderates

Balance-level delinquencies in credit card segment stood at 1.8% in Q1FY25 – highest among all other credit divisions. Balance-level delinquencies in the credit card segment saw a 17 basis points (bps) year-on-year (Y-o-Y) rise in the quarter ending June 2024 (Q1FY25). In all other credit segments, including personal loans, delinquencies declined even as retail credit growth moderated, consequent to banks tightening the supply of credit to the unsecured segments, a report by TransUnion CIBIL said on Monday. Data shows that balance-level delinquencies, measured in terms of 90 days or more past due, in the credit card segment stood at 1.8% in Q1FY25– highest among all other credit segments. Delinquencies in the credit card segment have been increasing in the past few quarters. They stood at 1.7%, up 14 bps Y-o-Y in March 2024, and at 1.68% in September. Similarly, in June 2023, delinquencies in this segment stood at 1.68%, up 17 bps. The other credit segments that the bureau has included in its report include mortgage loans, loan against property (LAP), auto loans, two-wheeler loans, personal loans, credit cards, and consumer durable loans. While delinquencies in the home loan segment stood at 0.9% in June 2024, LAP, auto loans, personal loans, and consumer durable loans reported delinquencies of 1.6%, 0.6%, 1.2% and 1.4%, respectively. “The credit market indicator (CMI) for consumer performance improved by six points from 96 in June 2023 to 102 in June 2024, reflecting the continued improvement in overall balance-level serious delinquencies across most product categories,” the report said, adding that in contrast to all other credit products, credit cards showed a marginal increase in delinquencies, continuing the trend set over the last four quarters.