The news: Total US household debt decreased by $13 billion to $18.8 trillion during Q2 2026—a 0.1% decline QoQ, per Federal Reserve Bank of New York’s Quarterly Report on Household Debt and Credit.

• Mortgage and student loan balances decreased by $74 billion and $7 billion, respectively, by the end of June. 
• Total credit card debt reached $1.263 trillion, up $54 billion YoY and $21 billion QoQ.
• And other debts, including retail cards and consumer finance loans, reached $568 billion, up $28 billion YoY and $6 billion QoQ.

How we got here: Consumer credit cards use over the quarter reflected signs of restraint amid pressure from inflation, tariffs, the war in Iran, and a weakening job market.

Trends for loan performance spelled out a more complex story. The percentage of credit card balances 90+ days delinquent increased from 12.2% in Q2 2025 to 12.9% in Q2 2026, sparking worry that consumers are slipping behind on payments at a clip not seen since the Great Recession. 

And while the rate of consumers entering delinquency has stabilized over the last two years, it’s still high: The share loans transitioning into early- and late-stage delinquency hit 8.69% and 6.97%, respectively. 

Implications for issuers: Consumers are exercising carefulness, reflected in weak demand for credit. A net 2.2% of banks reported higher demand for credit card loans, per the Fed’s July 2026 Senior Loan Officer Survey, while underwriting tightened.

This suggests that the pools of both consumers who both want credit cards and who are likely to be approved are shrinking. This contributes to tighter competition for the affluent cardholders who dominate spending: The top 10% of consumers by income are driving the same amount of discretionary spending as the bottom 70% of US households, per the Bank of America Institute. 

Increasing marketing budgets to reach these populations, as well as adjusting rewards lineups for premium cards that better mirror these consumers’ preferences, can help issuers to secure their loyalty.

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