US credit card balances rose by $21 billion in the second quarter of 2026 to $1.26 trillion, while the pace of new card delinquencies barely moved, the Federal Reserve Bank of New York said on August 11, 2026, in its Quarterly Report on Household Debt and Credit. The same day, New York Fed researchers explained why the card delinquency measure most cited over the past three years overstates how much trouble cardholders are in.
The report is the standard gauge of US household credit, and by extension of the economics of card issuing: US banks earn most of their card margin from interest on these balances, far more than from interchange.
Household debt dips as card balances keep growing
Total household debt fell by $13 billion, or 0.1%, to $18.8 trillion. Housing debt drove the decline, while consumer credit kept growing.
| Category | Balance | Change over the quarter |
|---|---|---|
| Mortgages | $13.1T | -$74B |
| Auto loans | $1.71T | +$28B |
| Student loans | $1.65T | -$7B |
| Credit cards | $1.26T | +$21B |
| Home equity lines of credit (HELOC) | $459B | +$13B |
| Total | $18.8T | -$13B |
Delinquencies edged down, with 4.7% of outstanding debt in some stage of delinquency. “Delinquency rates across most products have held steady over the past two years,” said Joelle Scally, economic policy advisor at the New York Fed. “Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we’ll continue to monitor.”
Two card delinquency measures tell opposite stories
For anyone who reads risk statistics, this is where the report gets interesting. Two card delinquency indicators coexist, and they point in opposite directions.
- The stock measure: the share of card balances that are 90 or more days delinquent. It rose from 7.6% in the third quarter of 2022 to 12.8% in the first quarter of 2026, an increase of two-thirds.
- The flow measure: the transition rate into serious delinquency, meaning the annualized share of balances that newly become 90 or more days delinquent. It went from 6.93% to 6.97% year over year, essentially flat.
- The benchmark: about 9% of card balances are at least 30 days past due, a level first reached in 2024 that has held since.
Charged-off debt now stays on credit reports longer
In a Liberty Street Economics post published the same day, five New York Fed researchers, Donghoon Lee, Daniel Mangrum, Joelle W. Scally, Tejas Sinha, and Wilbert van der Klaauw, resolved the contradiction. They found that “the stock delinquency rate is rising because of a pool of stale, charged-off debts that lenders have been reporting for longer durations, rather than a fundamental worsening in the incidence of delinquency.”
When an issuer charges off a debt, it keeps reporting it to the credit bureaus as long as it pursues collection. That period has grown longer. The share of charged-off debt still being reported a year later rose from about 40% in 2004–2012 to 80% in 2024. The result is a mechanical increase in the stock of balances shown as seriously delinquent, without a single additional cardholder missing a payment. Once charged-off balances are stripped out, all three delinquency measures line up and show repayment behavior that has been stable since 2024.
A risk metric is only as stable as its reporting rules
The first lesson is about method, and it applies well beyond the US. A risk indicator is the product of a reporting convention before it is an observation of the world. Changing how long a debt stays visible moves the curve without changing anything about the customers. Any international comparison of delinquency rates, and any alert based on a long time series, requires checking that the convention has not shifted along the way.
- For card issuers: growing balances with a stable flow of new delinquencies describe a portfolio that is working, not one that is deteriorating.
- For auto lenders: the signal is less clear, with about 8% of balances 30 or more days past due and the transition rate into serious delinquency up from 2.93% to 3.00% over the year.
- For mortgage lenders: about 4% of balances are 30 or more days past due, but the transition rate into serious delinquency rose from 1.29% to 1.52%, the largest relative increase of the three.
There is a direct consequence for the payments market. Card balances that grow while total household debt shrinks show that revolving credit is still funding everyday spending, even at high interest rates. That balance base underpins co-brand card programs, card-linked installment offers, and the battle for digital wallets, and it is not contracting.