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“U.S. consumer delinquency glass is half full” refers to the idea that, while more Americans are falling behind on some debts, the overall picture is not yet a classic pre‑recession credit crisis.
What the phrase is pointing to
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Credit card, auto, and especially student loan delinquencies have risen from their very low post‑pandemic levels, and aggregate delinquency rates are now described as “elevated.”
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At the same time, overall household debt service payments are still relatively low compared with past cycles, and some key delinquency measures (like credit cards at major banks) have been leveling off or even edging down in 2025.
Reasons the glass looks “half full”
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Household debt service as a share of disposable income has stabilized a bit above 11%, which is lower than just before the 2020 downturn and below readings seen before several earlier recessions.
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Recent data show credit card delinquency rates easing from their 2023–early‑2024 peaks, and overall delinquency shares (all loans combined) are rising only gradually rather than spiking.
Reasons the glass is also “half empty”
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Total household debt is at a record high, and the share of balances in some stage of delinquency has climbed from post‑pandemic lows, with about 4–5% of outstanding debt now delinquent.
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Stress is concentrated: younger and lower‑income borrowers, as well as certain regions and student‑loan borrowers after payment resumption, are seeing much sharper jumps in serious delinquencies than the averages suggest.
How to read it for the economy and markets
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For the macro economy, current delinquency patterns imply slowing consumer strength and rising strain, but not yet the widespread, systemic credit deterioration typical of recessions.
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For markets and lenders, the “half full” view supports a softer‑landing narrative, but the “half empty” details argue for caution around segments tied to lower‑income consumers, revolving credit, and student debt.
Credit card delinquencies in 2025 have stopped rising and, at banks, edged lower mainly because borrowing growth has cooled, lenders have tightened standards, and many consumers still have enough income and discipline to keep paying.
Slower borrowing and tighter credit
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Research from the Federal Reserve notes that a key reason delinquencies have flattened is the slowdown in credit card borrowing since early 2024, together with the lagged impact of tighter bank lending standards, which reduces the flow of riskier new accounts.
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Industry and credit‑score data show that new credit card originations have declined in 2025 as lenders become more cautious, especially toward lower‑score borrowers, which mechanically tempers delinquency growth.
Labor income and consumer adjustment
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Analyses of bank and S&P Global data attribute falling charge‑offs and lower delinquency rates at large issuers partly to growth in household earnings, which has helped many cardholders keep up with payments despite high rates.
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Credit bureau and lender commentary suggests that many borrowers are actively prioritizing card payments, trimming discretionary spending, and restructuring finances, leading to “financial discipline” that supports lower delinquencies and charge‑offs.
Portfolio mix and risk management
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Fed work emphasizes that recent credit card performance has been relatively stable across credit scores, reflecting earlier risk‑management moves such as tighter standards after the pandemic‑era run‑up in leverage.
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Banks and card issuers have also adjusted portfolios by cutting limits, tightening underwriting, and slowing growth among subprime segments, which tends to improve average delinquency metrics even as stress remains for weaker borrowers.
Macro backdrop and stabilization
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New York Fed household credit reports show aggregate delinquency rates elevated but no longer accelerating, with card delinquencies stabilizing as the broader economy continues to grow and unemployment remains relatively low.
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Commentaries on the 2025 data characterize the credit card market as moving into a “stabilizing” phase: balances are high and interest rates painful, but the combination of income growth, tighter credit, and borrower adjustment has produced a plateau rather than a continued spike in delinquencies.
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