Credit card charge-offs and loan delinquencies have experienced another quarterly decrease.
According to first-quarter 2025 data, credit card charge-offs decreased to 4.29%, down from 4.54% in the previous quarter. This marks the second consecutive quarterly decrease. However, charge-offs remain very elevated compared to the last ten years. Due to a 9–12-month lag time before legal actions are implemented, the volume of charge-offs is expected to continue increasing year-over-year through the end of this year. The forecast for 2026 remains uncertain and will depend on whether charge-off rates continue to decline or not.
Delinquency data, which serves as a 6–9-month early indicator of charge-off rates, decreased from 2.97% to 2.93%. Although this represents the third consecutive quarterly decline, the rate of decrease is moderating, suggesting it might level off or potentially rebound.
“Transition rates into serious delinquency have leveled off for credit card and auto loans over the past year,” said Daniel Mangrum, Research Economist at the New York Fed. “However, the first batch of past due student loans were reported in the first quarter of 2025, resulting in a large jump in seriously delinquent borrowers.”
The Federal Reserve’s charts for the data referenced follow and are linked.
Charge-off Rate on Credit Card Loans
Delinquency Rate on Credit Card Loans
