It seems the data on changes in consumer spending and payment behavior during the pandemic never cease to amaze. As more data comes from 2020 and beyond, we learn more about the ever-changing consumer.
Before the pandemic, consumers put personal loans as a higher priority payment over credit cards. In other words, consumers were willing to let credit cards go delinquent before personal loans. That shifted during the pandemic. Consumers with one credit card placed a high value on its ability to purchase products, especially online (i.e., digitally). This makes sense as consumers were confined to their homes during much of the pandemic.
Those single credit cardholders put more effort into keeping their credit card payments current or not too delinquent versus personal loans. However, personal loans didn't take a back seat to credit cards — the delinquency rate gap between them closed. TransUnion data shows that single credit cardholders' 30-day-plus delinquency rates in September 2019 were 2.9% and for personal loans were 1.5%. By September 2020, those rates shifted to 1.8% and 1.1%, respectively.
The data shows that single cardholders reduced their delinquencies for both credit cards and personal loans but watched their credit cards more closely.
For those with at least three credit cards, the data shows similar behavior. In September 2019, their delinquency rates were 1.5% for personal loans and 2.9% for credit cards. By September 2020, it had dropped to 1.1% and 1.8%, respectively, showing a larger focus on keeping credit card delinquencies in check.
For these multi cardholders, they gravitated toward trying to keep at least one card (i.e., their primary card) current while allowing others to go delinquent. Keeping one card current still allows the consumer access to credit and the ability to purchase digitally. These users also tended to keep their personal loans current.