Subprime consumers continue paying their credit cards even as many struggle to cover everyday bills.
PYMNTS Intelligence’s May report, “Who Is the Subprime Consumer? A Behavioral Profile,” found that 55% of subprime consumers lived paycheck to paycheck with difficulty paying bills in January. The comparable share across all consumers was 24%.
The report’s February findings on card balance management show how borrowers and how subprime cardholders managed their monthly balances. Among subprime respondents reporting their card payment behavior, 45% paid more than the minimum but less than the full monthly balance. Another 31% paid only the minimum, 15% paid in full and 9% paid less than the minimum.
Most reported paying at least the required amount, although relatively few cleared their monthly balances.
Payments Continue Despite Affordability Concerns
Recent earnings commentary describes continued repayment among borrowers with less-than-prime credit profiles (generally below the FICO score of 660).
Consumer financing company Synchrony, whose third-quarter results PYMNTS covered, reported that its nonprime payment rate rose 40 basis points from the previous quarter. CFO Brian Wenzel said the increase matched that of customers with credit scores of 780 or higher, while acknowledging affordability concerns for some consumers.
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The company’s latest earnings presentation reported an overall payment rate of 16.9%, approximately 60 basis points above the previous year. We note that a lender can receive a larger proportion of outstanding balances while some customers continue to struggle with other obligations.
PYMNTS Intelligence found that the share of subprime consumers who always or usually carried card balances fell from approximately 50% in mid-2023 to 38% in January 2026. Separately, 35% held neither a credit card nor a store card in February. These findings describe payment frequency and access to cards.
The report generally defines subprime as a self-reported score of 300 to 619. Its January findings placed 17% of U.S. consumers in that category, equivalent to approximately 44 million adults.
Financing choices vary within this population, which in turn gives insight about how they are managing cards, perhaps by embracing other options while they manage traditional card debt. PYMNTS Intelligence research published in August found that 41% of subprime BNPL users surveyed in July had used Klarna during the preceding three months, compared with 21% who used PayPal Pay in 4.
Credit Expansion Adds Repayment Obligations
Banks are extending cards to more lower-score borrowers. As PYMNTS reported in October, Philadelphia Fed data showed consumers with credit scores below 660 accounted for 18.5% of new card accounts at large banks in the second quarter, up from 16.1% a year earlier. Their median new credit line was $600. This score category is broader than the report’s subprime definition.
Modest limits restrict the amount borrowers can initially owe. Subsequent increases require lenders to assess whether customers can sustain larger payments alongside existing bills. Making a payment, reducing an outstanding balance and having money left for ordinary expenses are separate measures of a borrower’s finances. The findings show that debt repayment and financial hardship coexist among subprime consumers, pointing to a delicate balancing act.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
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