U.S. Card Issuers: Asset Quality of Credit Card Portfolios in Fairly Good Shape to Cope with the Current Economic Anxiety

This commentary reviews the asset quality of U.S. credit card issuers' portfolios.

Key highlights include:

-- On aggregate, for the top six card credit card issuers, the credit risk exposure to nonprime credit segments is manageable and remains below pre-pandemic levels.

-- We expect the resumption of reporting delinquent federal student loans to credit reporting agencies that began in October 2024, to have a modest adverse impact on cardholders' credit scores in 1Q 2025.

-- Credit card underwriting standards tightened for the 9th consecutive quarter.

-- The proportion of accounts making the minimum payment has been trending upward but the proportion of those making full payments has increased relative to the pre-pandemic period and has stabilized at elevated levels.

"The risk profiles of U.S. credit card issuers' portfolios are in fairly good shape as indicated by the underlying trends in credit score distributions as well as the continued tightening in credit underwriting that have the card issuers well-positioned to navigate the deteriorating operating environment." said Yanni Koulouriotis, CFA, Senior Vice President - North American Financial Institution Ratings.