KBRA Financial Intelligence

Credit Card Boom Slows as Borrower Quality Remains Resilient

Credit card loan balances increased by a net $37.1 billion throughout 2025, a much narrower increase than 2024’s $50.4 billion surge. Last year’s gain represented just under 15% of the $253.3 billion rise in available credit limits throughout that period, implying the proportion of unused credit extended by banks via credit cards has risen significantly faster than balances.

As a result, the total credit card utilization rate remained below 20% throughout 2025. In 2024, credit card utilization reached the 20% threshold for the first time since 1992. It should be noted, however, that the quarter-over-quarter (QoQ) increase in utilization throughout 4Q 2025 was the most rapid of the year.

Simultaneously, the latest data from the Federal Reserve Bank of Philadelphia’s FR Y-14M reporting indicated that the number of outstanding credit card accounts held by large banks (those with over $100 billion in consolidated assets) is back on the rise after a short-lived declining throughout most of 2025. Although roughly 6.9 million accounts–or 1.5%–below the 4Q 2023 peak, the final quarter of 2025 did see the largest QoQ rise in outstanding credit card accounts in two years. Large banks represent 92.3% of all credit card lending in dollar terms.

The percentage of active accounts making only the minimum payment on their card balances was 10.7% in the latest quarter of data remaining below the all-time high of 11.1% reached in 4Q 2024. Meanwhile, the share of accounts paying off their entire balance increased to 36.1% of accounts, representing a plurality of borrowers and reaching a three-year high. A further 28.2% are making payments above the minimum but below the full balance, suggesting that many account holders continue to gradually increase their carried balances.

The Philadelphia Fed’s large bank survey also indicates that borrowers associated with newer accounts are generally higher quality compared to those of previous years. Just 16.4% of new credit card accounts were issued to recipients with a credit score below 660, down from 25.2% in 4Q 2021. In addition, those with credit scores below 660 have received only 3.8% of all new commitments made in 4Q 2025. Though that did mark an increase from 3.6% in the quarter prior, it remains among the lowest readings in series history.

Still, a large cohort of proactive borrowers helps explain why delinquency and charge-off rates on consumer credit cards have fallen throughout 2025. Call report data analyzed by KFI indicates that delinquency among all credit card loans extended by U.S. banks decreased by 16 basis points (bps) throughout 2025. Declines in credit card loan delinquency can be observed among credit card lending from institutions above and below the $100 billion asset threshold. KFI recently noted that a particularly steep drop in delinquencies across the broader consumer lending category throughout the past year can be attributed in part to improving quality among credit card loans.