Card balances rose by $22 billion from the second quarter to $1.285 trillion at the end of September 2026, rounded to $1.29 trillion in the New York Fed’s release. That total measures money outstanding across card accounts, including balances that have not fallen behind on payments. The annualized share of eligible card balances newly becoming at least 90 days overdue was 6.87% in the third quarter, against 7.05% a year earlier. Its denominator covers balances that were current or less than 90 days overdue in the preceding quarter, rather than every balance already seriously delinquent.
The Lending Decisions Came Earlier
The New York Fed researchers grouped cards by the years in which they were issued, allowing them to follow earlier lending decisions into subsequent payment problems. Their analysis found that the median credit score at issuance averaged 699 in 2017–19, compared with 688 in 2020–22, using Equifax Risk Score 3.0. Those figures describe scores when cards were opened, rather than the average score of all current borrowers. Pandemic payment protections had also supported credit scores by keeping some missed payments from being reported as delinquent, potentially making borrowers appear stronger when lenders assessed new applications.
Account Age Changes The Picture
Accounts opened in 2020–22 contributed substantially to new serious delinquencies as their payment problems rose rapidly during 2023 and into 2024, according to the researchers. Newly opened accounts have historically been more likely to fall behind, so the mix of older and newer accounts can affect the aggregate flow of new delinquencies. The pandemic group’s contribution is now fading as those accounts represent a shrinking share of surviving cards, while cards issued since early 2023 have generally gone to borrowers with higher scores.
Neighborhood Distress Still Runs High
The research also found that recent card-delinquency flows remained above pre-pandemic levels across neighborhood-income groups, with a wider gap between lower-income and higher-income areas. Borrowers were grouped using average income in their zip codes, a neighborhood proxy that does not establish any individual household’s earnings. Across all household debt, 5.0% of balances were in some stage of delinquency in the third quarter, up 0.3 percentage points from the previous quarter. That broader measure includes different loan types and existing overdue debt, so it can worsen even when the annualized rate of new serious card delinquency is lower than a year earlier.
New Lending Shapes The Outlook
The New York Fed authors anticipate further signs of improvement in new card delinquencies absent macroeconomic shocks, conditional on the evolving quality and composition of accounts. For bank earnings, fewer balances newly falling seriously behind could ease future credit-loss pressure, although the report does not quantify losses or establish that distressed households have recovered their spending capacity. Dollar traders would still need employment, inflation and policy evidence before translating this credit signal into a change in the US interest-rate outlook. The researchers identify the credit quality of the most recently issued cards as the largest influence on near-term delinquency rates.
This marketing material is provided for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any financial instruments.
Trading in securities involves significant risk and may not be suitable for all investors. Prices of securities may fluctuate significantly and may result in a total loss of your investment. Investors should be aware that losses may exceed potential profits when buying and selling securities. In certain market conditions, you may sustain losses that exceed your initial investment. Securities and contracts for differences are complex financial instruments that require a high level of knowledge and understanding. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.
Source: https://www.newyorkfed.org/newsevents/news/research/2026/20261110
