Q4 2024 Insights Report

Credit Card Performance Metrics Signal Continued Consumer Strain

In the fourth quarter of 2024, the percentages of credit card accounts 30, 60, and 90 days past due increased. The percentage of credit card accounts 90 days past due set a new series high. As shown in Figure 1, card performance is seasonal, with spikes in the fourth quarter and declines in the first quarter. The percentages of credit card accounts 30, 60, and 90 days past due are relatively unchanged year over year and remain elevated historically. Indeed, since the fourth quarter of 2019, the percentages of credit card accounts 30, 60, and 90 days past due have risen by 22 basis points, 18 basis points, and 14 basis points, respectively. Large banks mostly believe that credit card performance will remain at its current levels in 2025. However, the share of credit card accounts making the minimum payment has hit series highs in each of the past two quarters. Collectively, these trends, along with a new series high for revolving card balances, indicate greater consumer stress.

Credit Card Balances and Credit Limits Rise

Credit card balances rose 4 percent from the prior year, a substantial slowdown from the double-digit growth in 2022 and 2023. Large banks are extending more credit to the highest end of the credit spectrum. The 90th percentile current credit limit increased year over year by $1,000 to $19,500. Credit limits for this cohort had risen by less than $4,000 over the prior 11 years combined. The 90th percentile of original credit limits also rose by $1,000 to $14,000 year over year. Thus, both existing and new customers who qualify for larger credit lines are benefiting from higher credit limits. In contrast, the median current credit limit was steady at $5,000 relative to a year ago, and it is little changed over the past five years. The rise of higher-end credit limits is potentially muting utilization rates, the percentage of a credit card’s credit limit being used by a given borrower. Utilization rates at the 50th, 75th, and 90th percentiles are down year over year, although utilization among the heaviest users is just 14 basis points removed from the series high set a year ago.

Larger Loans Contribute to Slow Rebound in Mortgage Originations

New first-lien mortgage account originations grew for a third consecutive quarter, the longest streak since the first quarter of 2020 through the third quarter of 2021. Still, mortgage account originations were about 65 percent lower than the series average. As shown in Figure 3, the 90th and 75th percentiles of original loan size achieved series highs, while the 50th percentile was near a series high. The size of large bank mortgages for more expensive properties is growing faster than that of the median property. From the fourth quarter of 2019 through the fourth quarter of 2024, the 90th and 75th percentiles of original loan size surged by about 54 and 42 percent, respectively, while the 50th percentile increased by roughly 27 percent. Growth in loan sizes is closely tied to home price appreciation over the same period; the median sales price of homes sold from the fourth quarter of 2019 through the fourth quarter of 2024 rose by approximately 28 percent. While larger mortgages pose greater risk for lenders because of exposure to a single borrower, overall new mortgage borrower creditworthiness, as measured by original credit scores, original front-end debt-to-income ratios, and original loan-to-value ratios, slightly improved from the previous quarter and reached the highest level observed in 2024. However, if a mortgage is above a certain dollar size, set by the Federal Housing Finance Agency and known as the conforming loan limit, it carries greater risk for the lender beyond the creditworthiness of the borrower. These risks include the property being harder to sell in foreclosure and the inability to sell the mortgage to a government-sponsored entity. While some high-cost counties have higher loan limits, the national one-family conforming loan limit has grown by just over 58 percent ($282,200) from the fourth quarter of 2019 through the fourth quarter of 2024 and jumped by another $39,950 in 2025. The conforming loan limit continuing to outpace large bank mortgage size would reduce the number of nonconforming loans, potentially strengthening firms’ willingness to originate larger mortgages.