Major Banks Flag Mixed Signals in Consumer Credit as Card Losses Edge Higher

The nation’s largest banks offered a warning and cautious view of the American consumer as they closed out 2025. Their earnings reports reveal rising credit-card charge-offs, expanding card balances, and early-stage delinquency increases—signs that, while household spending remains strong, pockets of stress are emerging across the lending landscape.

Bank of America

consumer net charge-offs of $992 million, up slightly from the prior quarter, and noted that early and late-stage credit-card delinquencies increased sequentially, though they remained below year-earlier levels. The bank’s credit-card charge-off rate improved to 3.40% from 3.46% in the third quarter but was still materially above pre-pandemic norms. The company added that combined credit and debit card spending rose 6% year over year, underscoring continued consumer engagement despite softening credit metrics.

Bank of America also highlighted continuing growth in card balances: average credit-card outstandings climbed to $103 billion, up from $101 billion in the prior quarter. Overall, the company recorded a $1.308 billion provision for credit losses, flat versus the third quarter. Nonperforming loans increased quarter over quarter, driven partly by commercial exposures.

JPMorgan Chase

In its Consumer & Community Banking unit, card net charge-offs were $1.9 billion, essentially unchanged from the prior quarter, while the card net charge-off rate stood at 3.14%. The bank pointed to strong consumer activity—card sales volume rose 7% year over year—but also acknowledged that growth in revolving balances contributed to higher risk-weighted assets.

JPMorgan’s firmwide provision for credit losses surged to $4.655 billion, up sharply from a year earlier, driven largely by a $2.2 billion reserve build related to its agreement to purchase the Apple credit-card portfolio. Excluding that one-time item, overall reserve changes were minimal, though management noted ongoing pressure in wholesale credit.

Citigroup

in U.S. Personal Banking net credit losses, which fell 7% year over year to $1.8 billion, reflecting what the bank called “improved credit performance” in retail services. However, Citi still recorded a $1.7 billion provision for credit losses, including a net allowance release of $110 million, and noted that consumer non-accrual loans increased 24% from a year earlier, concentrated in legacy mortgage exposures—particularly those affected by California wildfires.

Inside credit cards, Citi said Branded Cards revenues rose 5%, fueled by higher loan spreads and higher interest-earning balances. But the bank also reported higher rewards expenses, which weighed on non-interest revenue, and reiterated that credit performance in its retail card portfolio continues to normalize from unusually benign pandemic-era trends.

Wells Fargo showed the clearest

Company-wide net loan charge-offs rose to $1.046 billion, up from $942 million in the previous quarter. Management said the increase was driven by higher commercial real estate and commercial-and-industrial losses, but consumer credit also worsened: credit-card and auto charge-offs both increased, lifting the consumer charge-off rate to 0.75%, up from 0.73% in the third quarter.

Wells Fargo’s credit-card delinquency rates remained elevated: 30-day delinquencies stood at 2.80%, compared with 2.69% in the prior quarter. Average consumer card outstandings grew to $102.992 billion, reflecting robust spending and borrowing. The bank noted that auto loan delinquencies also remain higher, though down from earlier peaks.

While each bank emphasized consumer resilience—often pointing to strong deposit balances, rising card spending, and healthy labor markets—the credit data collectively show a system in late-cycle normalization. Higher borrowing costs, elevated revolving balances, and rising delinquencies are beginning to pressure households, even as banks maintain that asset quality remains broadly manageable.

Across the four institutions, the common thread is that consumers continue to spend aggressively and maintain solid cash flows, yet signs of strain—from rising charge-offs to creeping delinquencies to selective reserve builds—have become harder to ignore. Whether these represent temporary friction or the early stage of a deeper credit deterioration will be a central question for the banking sector in 2026.

Taken together, the data suggest that the American consumer remains energetic—continuing to spend and drive growth in card volumes—but is beginning to show unmistakable signs of strain. Rising delinquencies, higher charge-offs, and growing card balances across the major banks point to mounting financial pressure, even as overall activity remains solid. For now, households are still holding up, but the credit metrics emerging at the nation’s largest lenders indicate that the foundation of consumer strength is starting to crack at the edges.