The issuance of credit card securitizations might get a boost later this year, according to Standard & Poor’s.
The potential catalyst is the rise in consumer credit.
The Federal Reserve reported on July 8 that consumer credit jumped by 8.25% in May year-on-year, reaching an outstanding volume of $2.84 trillion in May. Revolving credit, which primarily consists of credit cards, shot up 9.25% to $856 billion. The nonrevolving variety, including auto- and student loans, climbed 8%, to $1.98 trillion.
The volume of credit card receivables held by securitization vehicles dipped in May by an annual 0.5%. S&P said the rise in consumer debt is a sign of an improving economy.