Q2 2025 Credit Card Charge-Offs Decreased While Delinquencies Remain Unchanged

Credit card charge-offs experienced another quarterly decrease, while loan delinquencies have remained unchanged.

According to second-quarter 2025 data, credit card charge-offs fell to 4.04%, down from 4.26% in the prior quarter—the third straight quarterly decline.  Despite this, charge-offs remain very elevated compared to the past decade, while early indicator credit card delinquencies appear to have stabilized. Because legal actions typically lag by 9–12 months, charge-off volumes are expected to stay high through year-end. The 2026 outlook remains uncertain and will depend on whether the charge-off rate stabilizes in line with the delinquency trend.

Delinquency data, which serves as a 6–9-month early indicator of charge-off rates, remained steady at 2.93%. Although the recent declines have moderated, delinquency rates remain at a very high 10-year historical level.  It is unclear if this leveling off represents a new plateau or just a temporary stabilization.

“This quarter’s flow of household debt into serious delinquency was mixed across debt types, with credit card and auto loans holding steady, student loans continuing to rise, and mortgages edging up slightly,” Joelle Scally, Economic Policy Advisor at the New York Fed, said in a statement.

Looking ahead, several factors will impact credit card charge-offs and delinquencies, making the outlook uncertain. Following recent policy changes, student loan delinquencies have surged from less than 1% in Q4 2024 to 13% by Q2 2025. At the same time, credit card APRs are at the highest levels this century, while future FED interest policy remains unclear. With consumer credit card and overall household debt both at two-decade highs, the key question is: will consumer defaults increase in 2026?

The Federal Reserve’s charts for the data referenced follow and are linked.

Charge-off Rate on Credit Card Loans

View FED Graph here

Delinquency Rate on Credit Card Loans

View FED Graph here