- Key insight: Spending among consumers is still robust, despite some weakening economic indicators, New York Fed researchers said Tuesday.
- Supporting data: Total credit-card balances rose 5.7% in 2025, and the amount of debt that slid into delinquency declined.
- What's at stake: Sharp upticks in credit-card debt, especially as it goes bad, can be a signal that consumers are struggling with basic spending.
Delinquencies on credit cards mostly held steady at the end of last year, but those levels of sour debt are plateauing at elevated rates, and certain pockets of the economic spectrum aren't as strong as others.
Younger borrowers and those with lower incomes are shifting into delinquency more than other segments of consumers, according to the Federal Reserve Bank of New York's quarterly analysis of household debt and credit. The findings bolster a
"Overall the economy seems to be doing fine," a New York Fed researcher said on a call with reporters on Tuesday. "But when you look at how it differentiates amongst different groups of people, you see evidence consistent with a K-shaped economy, where … some groups are really struggling."
Credit-card balances rose 5.7% over the course of 2025, to $1.28 trillion, but that annual increase was smaller than the 7.3% rise from 2024 to 2025.
The Federal Reserve's latest survey of senior loan officers, released on Feb. 2, showed that credit-card demand in the fourth quarter of 2025 remained "basically unchanged" from the prior quarter. Lending standards in the credit-card business also remained "basically unchanged," according to the survey.
The percentage of card debt that became delinquent in the fourth quarter was 8.69%, down from 8.96% in the same period last year, the New York Fed found in the report released Tuesday. But 12.7% of card debt was 90 days or more delinquent, a figure that has been steadily on the rise.
During their quarterly earnings calls last month, bankers generally reported that credit quality was strong in the fourth quarter. And executives were mostly positive about the health of borrowers for 2026.
PNC Financial Services Group CEO Bill Demchak said he saw the health of the consumer as a tailwind for his bank this year. JPMorganChase Chief Financial Officer Jeremy Barnum said consumers remained resilient, and the bank's data didn't show signs of deterioration, "despite weak consumer sentiment." Capital One Financial CEO Richard Fairbank said his company was leaning into growth opportunities based on the health of the economy and the consumer.
On Tuesday, Bank of America CEO Brian Moynihan said that consumers spent 5% more money at the nation's second-largest bank in January 2026 than they did in January 2025.
"If you look at it, it's across the board," Moynihan said at an industry conference. "All the cohorts — low, medium and high-wage households — all grew at different growth rates. So the economy is real. The affordability question is real, but it's all growing."
Moynihan also pointed to what he portrayed as a disconnect between consumers' sentiments and their behavior.
"Look at what people do, not what they say they're going to do," Moynihan said. "You're finally seeing other people recognize that because of all the stuff that goes on around them, they may say they feel one way — but why would cruises be up double digits month after month after month if people really thought they were stressed?"
The average perceived probability of missing a minimum debt payment over the next three months decreased in January to 13.7% from 15.3% in December, according to separate data released by the New York Fed on Monday. Still, the January figure was slightly above the trailing 12-month average of 13.4%.
The New York Fed researchers said, though, that they can't parse how consumers are using their credit cards. Credit-card balances are typically seasonally high in the fourth quarter, due to end-of-year holiday shopping.
"We don't have a way to be able to see whether or not this is something that people are relying on for everyday expenses," a New York Fed researcher said.
If the next quarterly report shows that credit-card balances fell to a lesser degree from the fourth quarter of 2025 to the first quarter of 2026, it could suggest that consumers carried over more debt, and were using their cards on more need-based spending.
