Large Bank Credit Card and Mortgage Data 2025 Q2 Narrative

Q2 2025 Insights Report

by Lauren Lambie-Hanson & Victoria Osorio
Published: October 17, 2025

Card delinquencies fall, but many card borrowers are spending less in real terms; mortgage originations show modest growth

Credit card purchase volume reached an all-time peak in the second quarter of 2025, driven by high-credit-score borrowers’ spending. However, cardholders with credit scores below 720 are spending less in real terms than they were two years ago.

Meanwhile, two key measures of credit card performance improved: Loss rates and delinquencies declined year over year, following stricter underwriting practices adopted by card lenders and relatively low unemployment rates in recent years. New card originations posted the largest quarterly increase in three years, but new accounts continued to be concentrated among high-credit-score borrowers.

Although new mortgage lending remains sluggish relative to historical standards, large banks increased the dollar volume of new mortgage originations by 30 percent year over year, reaching the highest level of activity since the fourth quarter of 2022. Larger loan sizes helped boost origination growth.

For additional questions or feedback about these data and this report, please email Phil.LargeBankData@phil.frb.org.

Average Purchase Volume Has Declined in Real Terms for Card Borrowers with Credit Scores Below 720

Purchase volume is more indicative of consumer spending than outstanding balances, as balances also include any amount carried over from previous payment cycles and are reported net of any payments made by the account holder. When adjusting for inflation, total card purchase volume remains on par with its 2023 level, indicating that aggregate consumer spending using cards issued by large banks has remained at the same level in real terms for two years. Average account-level purchase volume has followed a similar trend.

For different credit score subgroups, spending patterns differ — Figure 1 shows average purchase volume by credit score group, both in real and nominal terms. For the highest tier of cardholders (those with a credit score of 720 and above), nominal average purchase volume reached a series peak in the second quarter, but after adjusting for inflation, purchase volume remains on par with its level from two years ago. This group represents roughly two-thirds of credit card accounts in the large bank data and is driving the overall trend for total average purchase volume in the large bank data series.¹ The trends in inflation-adjusted average purchase volume for the bottom two credit score groups tell a different story. In real terms, cardholders in the 660–719 credit score group had a purchase volume 5.4 percent lower than two years ago, and cardholders with credit scores below 660 had a purchase volume 8.5 percent lower than that in the second quarter of 2023. These two groups are roughly equal in size and represent nearly one-third of accounts when combined.

The decline in real spending among consumers with weaker scores could reflect a greater reluctance to spend due to weaker household finances, or these borrowers could be constrained by their limited credit lines, some of which are already maxed out or close to the limits.² For the last three years, at least 10 percent of card accounts have utilized over 92 percent of their credit limit,³ suggesting that many borrowers may not have had the ability to spend more on their credit cards. Moreover, low-score borrowers have been offered smaller credit line increases than high-score borrowers, as documented by Experian.

Card Performance Improved, and New Lending Rose

Credit card performance improved in the second quarter of 2025, as fewer accounts fell behind on payments than at the same time last year. Figure 2 shows the net charge-off rate alongside the 60 or more days-past-due rates (both accounts- and balances-based) since 2019. The performance improvements observed in the past year also hold true for the 30- and 90-days-past-due rates. This turnaround in performance could be a result of credit tightening by lenders over the past three years, which has reduced credit risk in large banks’ card portfolios, as discussed in our Q1 2025 Insights Report.

New credit card originations posted the largest quarterly increase in three years (both dollar- and accounts-based) and remain 3.2 percent above their level one year ago. New origination activity continued to be concentrated among prime and super-prime borrowers. Only 16.2 percent of accounts originated in the second quarter were opened by subprime borrowers (with scores below 660), near the historical low for this series.

Mortgage Origination Volume Showed Modest Growth, Boosted by Larger Loan Amounts

Large banks originated about 127,000 new mortgages in the second quarter, totaling $77.3 billion, a 30 percent year-over-year increase. Larger loan sizes helped fuel the growth. As shown in Figure 3, the median loan amount for all new mortgages originated by large banks (including purchase and refinance loans) increased 4.8 percent year over year, to $356,400.

Nearly three-quarters of new mortgage balances were for purchase loans, which increased 10 percent year over year. In fact, the second quarter of 2025 boasted the greatest purchase mortgage dollars originated since the fourth quarter of 2022. Growth in purchase mortgage balances is driven in part by larger loan amounts, rather than simply a greater number of new accounts. In the broader context of the U.S. housing market, existing home sales in April fell 1.1 percent year over year, while median sale prices increased 1.4 percent, as reported by Redfin. Purchase mortgage volumes remain low compared with normal, pre-pandemic levels, when mortgage interest rates were 200 to 300 basis points lower.

Large banks’ refinancing activity showed notable year-over-year growth, with new balances increasing by more than 300 percent for rate/term refinances and 71 percent for cash-out refinances. However, this is largely an artifact of the second quarter of 2024 being near the all-time low for refinancing in the series. By historical standards, refinancing business for large banks remained slow in the second quarter of this year, owing to mortgage interest rates staying around 7 percent.⁴

Disclaimer: The views expressed in this report are solely those of the authors and do not necessarily reflect the views of the Federal Reserve Bank of Philadelphia or the Federal Reserve System.

Endnotes

¹ We estimate that 17 percent of accounts are held by those with credit scores lower than 660, 16 percent are held by those in the 660–719 range, and two-thirds are held by those who fall in the above 720 credit score range. This is based on applying a linear interpolation to the publicly available data on score distributions, i.e., the Q2 credit score 50th, 25th, and 10th percentiles falling at 769, 694, and 627, respectively.

² Survey research from the Federal Reserve Bank of Philadelphia’s Consumer Finance Institute finds that nearly half of all respondents reported cutting back on discretionary spending in the year leading up to July 2025 to make ends meet. Results suggest that Federal Housing Administration mortgage borrowers and renters, groups that tend to be younger and often have lower average credit scores, are more likely to have cut discretionary and essential spending, respectively, than other survey respondents.

³ Based on the 90th percentile utilization rate in our data.

⁴ Data on quarterly average fixed-rate mortgage interest rates for new originations, segmented by credit score and loan-to-value ratio, can be found in the Large Bank Mortgage Data.

Note that historical data will be revised periodically for firms that have started or stopped reporting FR Y-14M data and the panel of published FR Y-14M reporters is adjusted. Therefore, historical values may change over time. Please see our data methodology for further details.