For two years, the worry about the American consumer has centered on one bill: the credit card. Balances kept climbing, interest rates stayed near records and every quarter brought a fresh round of warnings that households were tapped out. The first big bank reports of the fall tell a calmer story. Card borrowers are paying their bills a little better than they were a year ago, and the banks are lending more, not less.
That matters on both sides of the ledger for anyone over 50. Investors in bank and card stocks want to know whether consumer credit is about to turn, with Bank of America reporting Oct. 14 and the big card specialists the following week. Households want to know why the interest rate on their own card has barely budged even as the lenders say the risk is easing.
- JPMorgan Chase filings: the Card Services net charge-off rate fell to 2.91% in the third quarter, from 3.15% a year earlier and 3.34% in the second quarter, while average card loans grew 7% to $250.1 billion.
- Citigroup filings: net credit losses in U.S. Consumer Cards fell 4% from a year earlier to $1.67 billion, even as U.S. card spending rose 11% to $175 billion.
- Federal Reserve G.19 data: the average rate on card accounts that pay interest was 22.36% in the latest survey, up from about 16.5% in 2021, so lower losses have not yet meant cheaper borrowing.
The losses are easing, not exploding
JPMorgan, the country's largest card issuer by spending, reported on Oct. 13 that its Card Services net charge-off rate, the share of balances written off as uncollectible, dropped to 2.91% in the quarter ended Sept. 30. That compares with 3.15% a year earlier. The bank still expects a full-year rate of about 3.2%, which suggests a modest seasonal pickup in the fourth quarter rather than a turn for the worse.
Citigroup told a similar story. Net credit losses in its U.S. Consumer Cards business fell 4% from a year earlier, which the bank credited mainly to better performance in its private label store cards. Wells Fargo said its consumer net loan charge-offs eased to 0.70% of average loans, helped by lower credit card losses, partly offset by higher auto losses.
The New York Fed's household credit data point the same way. Its second-quarter report showed card balances at $1.26 trillion, up $21 billion in the quarter. But the rate at which card balances moved into serious delinquency, 90 days or more behind, was 6.97% on an annualized basis, nearly unchanged from 6.93% a year earlier. The New York Fed said new card delinquencies remain elevated but have been largely stable since 2024.
There is one widely quoted number that looks scarier than it is. The share of card balances 90 or more days delinquent rose from 7.6% in late 2022 to 12.8% in early 2026. In an August analysis, New York Fed researchers found that rise mostly reflects old, already charged-off debts that lenders keep reporting for longer, not a fresh wave of people falling behind. More than 23 million Americans still carry those charged-off balances on their credit reports.
Spending is still growing
Consumers are not just paying. They are still swiping. JPMorgan's credit card sales volume rose 9% from a year earlier to $376 billion in the quarter, and its combined debit and credit volume rose 10%. Citi's U.S. card spending rose 11%, though part of that gain reflects an American Airlines co-branded portfolio Citi took on in the second quarter. Wells Fargo's card purchase volume rose 12% to $45 billion, and it opened about 661,000 new card accounts.
Jamie Dimon summed up the backdrop in JPMorgan's release: "The U.S. economy continued to be fueled by strong business investment and ongoing consumer spending. However, large fiscal deficits, sticky inflation, elevated asset prices, rising interest rates and geopolitical conditions continue to shift under the surface."
That caution showed up in the numbers too. Citi added $207 million to its card loss reserves in the quarter, citing changes in its economic outlook rather than any deterioration in its own borrowers. Banks build reserves before trouble, not after it, so investors will watch whether that becomes a pattern across the industry.
Why your card rate has not come down
Here is the part that frustrates households. Card losses are lower than a year ago, yet the price of carrying a balance is not. The Federal Reserve's latest consumer credit survey put the average rate on card accounts that were charged interest at 22.36%. In 2021, that figure was about 16.5%.
Part of the gap reflects the Fed's rate increases since 2022, and with longer-term interest rates rising again this fall, there is little pressure on banks to cut. Part of it is simply that card lending is very profitable. JPMorgan's Card Services net revenue rate, a measure of what the bank earns on its card balances, climbed to 10.76% from 10.03% a year earlier. Revenue in its Card Services and Auto unit rose 15% to $8.3 billion.
Washington has talked about stepping in. In January, President Trump called for a one-year 10% cap on card interest rates. But a cap would generally require legislation, and the two bills that would impose one, both called the 10 Percent Credit Card Interest Rate Cap Act, have not moved out of committee since they were introduced in early 2025.
The rewards arms race is costing the banks
The other trend inside the reports is how much banks are spending to win the best customers. Citi said non-interest revenue in its U.S. card business fell 62% from a year earlier, driven by higher payments to partners such as airlines and higher rewards costs. JPMorgan cited higher marketing expense as a key driver of rising costs in its consumer bank.
That fits what cardholders have seen since 2025, as premium cards raised annual fees and loaded up on travel credits and points. The economics work for banks when the cardholder pays in full and spends heavily, because they collect swipe fees from merchants and annual fees from users. They work even better when a customer carries a balance at 22%.
What investors should watch
The next two weeks fill in the picture. Bank of America reports before the open on Oct. 14. Capital One, which now owns Discover and its payment network, reports after the close on Oct. 20, and store card specialist Synchrony reports that morning. American Express follows on Oct. 23.
Three questions matter most. First, do Capital One and Synchrony, which lend to more borrowers with lower credit scores than JPMorgan does, show the same improvement in losses? Second, do more banks follow Citi in adding to reserves because of the economic outlook, even while current losses fall? Third, does the cost of rewards and partner payments keep eating into card fee revenue?
The reaction on social media captured the split. Many investors on X welcomed the reports as proof that the consumer is holding up, while skeptics argued the banks are describing their best customers, not the whole country. Both can be true. Big bank card portfolios lean toward borrowers with strong credit, and the New York Fed data show stress concentrated among younger and lower-income households.
What it means for your household
For readers over 50, the encouraging news is that older borrowers have long fallen behind on cards far less often than younger ones, according to New York Fed data. The harder news is that the cost of a balance remains historically high. At an average rate near 22%, carrying $5,000 on a card for a year costs roughly $1,100 in interest.
Pay in full when you can. If you carry a balance, call your issuer and ask for a lower rate. A clean payment history and a long relationship give you leverage, especially now that banks say losses are falling.
Look beyond the big banks. Federal credit unions are generally limited to an 18% rate ceiling, and many charge far less for members with good credit.
Be careful with balance transfers. A 0% introductory offer can save real money, but most charge a transfer fee of 3% to 5%, and the rate jumps once the promotion ends.
Audit your rewards cards. Premium cards with annual fees of several hundred dollars only pay off if you actually use the credits and travel perks. If you do not, a no-fee card may leave you ahead.
The bottom line: the big banks are saying the American card borrower is in better shape than the headlines suggested, and they are leaning in with more lending and richer rewards. For investors, the test moves next to the card specialists later this month. For households, lower losses have not yet translated into lower rates, so the best savings still come from paying down balances and shopping around. This article is general information, not personalized financial advice.
