Large Bank Credit Card and Mortgage Data 2025 Q3 Narrative

Credit Card Spend Remains Strong Despite Subdued Consumer Sentiment

Large banks' aggregate credit card balances rose modestly year over year and remain close to the historical peak. Total purchase volume increased as well, climbing to its highest point in the data series, despite measures of consumer sentiment implying a cautious outlook. At the same time, the overall number of credit card accounts is essentially unchanged from a year earlier, signaling that consumers are relying more heavily on existing credit lines as prices rise.

The average purchase volume per account continued to increase within all credit score bands on a year-over-year basis. Notably, although spending among the most creditworthy consumers (those with credit scores of at least 720) never contracted post-pandemic,¹ borrowers with lower scores underwent a multi-quarter stretch of year-over-year declines (Figure 1).

Within all credit score groups, average purchase volume returned to growth in the final quarter of 2024. The post-pandemic contraction was most pronounced among borrowers with scores below 660, but spending within this cohort is now rebounding the fastest, up 8.6 percent over the past year. With the estimated share of accounts with credit scores below 660 holding steady year over year (at roughly 17.5 percent²) and the overall number of accounts flat, these borrowers appear to have limited alternatives to increasing spending on their current accounts.

Aggregate revolving balances reached a new high in the third quarter, and the cost of carrying credit card debt remains elevated. The average purchase APR for general-purpose cards sits at 24.5 percent, near the series peak. Although the prime rate fell by 125 basis points from mid-2024 to the third quarter of 2025, the average APR for general-purpose cards declined by just 27 basis points over the same period, in part reflecting the gradual increase in aggregate credit card interest rate margin covered in our Q1 2025 Insights Report. This coincides with a near-series-low share of accounts carrying promotional APR balances (excluding the pandemic period), indicating that fewer borrowers are benefiting from temporary rate relief than in the past.

Credit Card Performance and Payment Behavior Show Progress

The shares of balances and accounts 30+, 60+, and 90+ days past due have improved year over year in every quarter of 2025, following the steady deterioration observed from 2022 to the end of 2024. The net charge-off rate has also eased on a yearly basis, registering declines of 64 and 58 basis points in the second and third quarters. That said, all credit performance indicators remain elevated relative to pre-pandemic norms (Figure 2).

A key driver of these improvements - despite economic pressures and high APRs - is the tightened underwriting standards that large banks implemented in recent years. The shares of large bank new accounts and new commitments with borrower credit scores below 660 are now just 16.4 percent and 3.8 percent, respectively, compared with 25.2 percent and 7.0 percent, respectively, in fourth quarter 2021. That said, large bank credit card underwriting trends have steadied and even loosened modestly of late. These large bank trends are conceptually consistent with Senior Loan Officer Survey (SLOOS) responses suggesting that the net percentage of large domestic banks tightening standards for credit cards loans peaked in the second quarter of 2023, followed by gradual easing.

As lending standards have become more restrictive in recent years, the credit quality of the existing portfolio has also improved. The median score of outstanding credit card balances reached a series high of 769, up from 766 in the third quarter of 2024.

Another useful measure of credit card portfolio health, the share of accounts making only the minimum payment due, shows mild signs of improvement. This metric had crept up steadily from a series low of 8.0 percent in early 2021 as inflation persisted and households' excess savings dwindled. Although still elevated by historical standards, it declined slightly to 10.7 percent in the third quarter of 2025 compared with a year earlier.

First Mortgage Loan Size Grows as Delinquency Rates Rise Slightly Year over Year

Total balances associated with the large banks' first-lien mortgage portfolios stood at $1.45 trillion at the end of the third quarter, virtually unchanged from a year earlier. In real terms, outstanding balances have shrunk year over year for more than two years. Over that same period, the total number of loans held in portfolio declined from each quarter to the next at a steady clip of roughly 1 percent, although this gradual decrease in loan count is part of a longer-running trend.

Origination activity has held well below typical historical volumes since late 2022, following a sharp rise in mortgage rates. More recently, however, lending has shown early signs of recovery, with new mortgage originations by the large banks growing 13.4 percent in the third quarter relative to a year earlier. (A similar trend can be observed in wider mortgage market data.) New large bank refinance volume, including cash-out, rate-and-term, and other purposes, collectively rose year over year by more than 50 percent, albeit from extremely low levels, even as average mortgage rates offered by the large banks remained nearly unchanged.³ New purchase lending, which also has been subdued, expanded more modestly by 4.0 percent.

The median large bank mortgage balance has risen 15.8 percent over the past two years, or 10.0 percent when adjusting for home price growth. However, higher loan amounts do not imply that large banks' mortgage borrowers are in danger of becoming overextended. Back-end debt-to-income ratios, which offer the most complete view of borrowers' overall indebtedness, have remained more or less flat. Selective lending criteria and loan retention practices over an extended period have shaped a portfolio with high credit quality. For example, the 10th percentile refreshed credit score has risen more than 100 points over the past decade to 696. Furthermore, delinquency rates remain low by historical standards, as shown in Figure 3. That said, the third quarter saw the shares of balances 30+, 60+, and 90+ days past due tick up by 10, 14, and 13 basis points, respectively, compared with one year earlier, in line with similar year-over-year increases in the first and second quarters of 2025.