Fed Data Shows Credit Card Balances Decline in Q1, but 90-Day Delinquencies Surge

The latest data on household debt from the Federal Reserve Bank of New York, released Tuesday (May 13), indicated that consumers paid down some of their credit card debt in the first quarter of 2025.

But late-stage delinquencies on that revolving debt surged year over year. Student loan delinquencies also surged year over year, as past-due reporting on those loans returned to credit reports after a long absence spurred by the pandemic.

The picture that emerged is one where households still have a lot of spending power, at least as measured in terms of available credit. However, the mounting pressures of past-due debt may wind up dinging credit scores, and individuals may shift their focus to triaging their delinquencies.

Household debt reached $18.2 trillion in Q1, increasing by $167 billion, a 0.9% rise from Q4 2024 and a 2.9% year-over-year increase. This marked the lowest annual growth rate since Q1 2021.

Mortgage balances rose by $199 billion to $12.8 trillion, making up 70.3% of total debt. Home equity lines of credit (HELOCs) increased by $6 billion, continuing a streak of 12 consecutive quarters of growth and bringing total HELOC balances to $402 billion.

Auto loan balances declined by $13 billion to $1.64 trillion, marking only the second quarterly drop since mid-2011. Other consumer debt, including retail card balances, fell by $12 billion, while student loan balances grew by $16 billion, reaching a total of $1.63 trillion. Overall, non-housing balances declined by $38 billion, a 0.8% decrease from the previous quarter.

Credit card balances fell by $29 billion to $1.18 trillion, although they remain 6.01% higher than a year ago. Credit cards now account for 6.5% of total household debt.

As for the spending dry powder, the total credit card limit stands at $5.16 trillion, with owed balances representing 22.9% of this limit, 3.9% lower than in Q4 2024, which reflects the paydown.

Rising Card and Student Loan Delinquencies

Delinquency rates rose in Q1, with 4.3% outstanding debt in some stage of delinquency, at recent highs, and up from 3.6% at the end of last year.

Serious delinquencies, defined as debts that are 90 or more days past due, rose to 2.8% of total debt, a 52% increase from Q1 2024.

Mortgages, credit cards and student loans were the primary drivers of the rise in serious delinquencies.

Student loan delinquencies surged, with the serious delinquency rate increasing from 0.53% in Q4 2024 to 7.74% in Q1 2025. This marks the highest level of student loan delinquencies since the start of the pandemic.

Early delinquency rates remained steady for most types of debt, except for student loans, which experienced a sharp increase due to the resumption of reporting delinquent accounts after nearly five years of pandemic-related pauses. Bankruptcy notations fell, with 105,000 consumers filing for bankruptcy in Q1, a decline from the previous quarter. Meanwhile, the percentage of consumers with third-party collection accounts on their credit reports remained stable at 4.6%.

Credit card delinquencies also increased, with the rate of delinquencies over 90 days climbing to 12.3%, an 8.5% rise from Q4 2024 and the highest since Q1 2011. Among consumers under 30, serious credit card delinquencies reached 10.3%, a 4.4% increase from a year ago.

Meanwhile, the PYMNTS Intelligence report “Consumers Focused on Rewards Are Less Likely to Have or Want Loans” found that a subset of cardholders, defined as “credit treadmillers,” make only the minimum payments on their cards and are more likely to have student loan debt than other cohorts.