Large Bank Credit Card and Mortgage Data 2026 Q2 Narrative

Lower-Score Accounts Gain Share of Credit Card Originations

Total credit card dollar originations at large banks rose modestly by 1.5 percent year over year. This represents the fifth consecutive year-over-year increase in overall new commitments, although it is the smallest increase in this streak.

Meanwhile, the number of new credit card accounts grew more sharply, by nearly 4 percent since this time last year. With new account growth outpacing commitment growth, the average new credit line fell from $6,216 in the second quarter of 2025 to $6,066 in the second quarter of 2026.

One driver of the smaller average new credit line is a notable compositional shift in the type of consumers banks are lending to. Specifically, large banks have grown their share of newly originated accounts belonging to borrowers with credit scores below 660 - rising from 16.1 percent in the second quarter of 2025 to 18.5 percent in the second quarter of 2026. New credit lines made to lower-score consumers are typically much smaller than for higher-score borrowers.

At the same time, new credit lines for the median newly originated account remained stable or increased across credit score groups (Figure 1). The median credit line remained at $7,000 for the highest score group (>=720), increased from $2,600 to $2,700 for accounts with scores from 660 to 720, and rose from $500 to $600 for accounts with scores below 660. Despite the recent increase, the median new credit line for the lowest-score group remains below the levels observed at several points in earlier years, including more than a decade ago. As discussed last quarter, the longer-term decline becomes more evident after adjusting for inflation.

In short, large banks continue to expand credit availability to higher-risk segments, while remaining cautious about the amount of credit extended to individual borrowers. This points to a measured expansion rather than a broad easing of credit standards. The share of new accounts with credit scores below 660 remains well below its historical peak of 27 percent from more than decade ago, while the recent July 2026 Federal Reserve Senior Loan Officer Opinion Survey (SLOOS)¹ results indicate that lending standards for subprime credit cards remain at the tighter end of their historical range.

Total Card Balance Growth Outpaces Revolving Balance Growth

Total credit card balances increased 3.4 percent year over year, reaching a new high, with the growth rate slightly elevated but broadly consistent with the pattern observed over the past six quarters. Revolving balances, while also near their series high, show a decelerating year-over-year growth rate.

Following the rapid post-pandemic expansion in credit card balances, growth in both metrics has moderated considerably (Figure 2). During much of 2022-23, revolving balance growth outpaced total balance growth, consistent with consumers revolving a higher share of balances after pandemic-era paydowns. However, starting around late 2024, this relationship reversed: Total balances have grown by about 3.3 percent on average year over year, while revolving balance growth has slowed further, reaching 1.5 percent by the second quarter of 2026. For comparison, from the first quarter of 2016 to the fourth quarter of 2019, total and revolving balances grew at a much more similar average rate of 5 percent and 4.8 percent, respectively.

The widening gap suggests that recent growth in total card balances is increasingly driven by nonrevolving balances - purchases that are paid off rather than carried from one billing cycle to the next. With credit card interest rates still very high, consumers may be particularly motivated to pay down new purchases rather than allow them to become costly revolving debt. Larger tax refunds during the 2026 filing season may also have provided consumers with additional funds to reduce outstanding credit card debt. Payment behavior is consistent with this interpretation: The share of accounts making a full payment on card balances reached 37 percent, matching the pandemic-era peak in the second quarter of 2021, when fiscal stimulus and elevated household savings supported consumers' ability to pay down card balances.

At the same time, declining delinquency and net charge-off rates suggest that consumers continue to manage their credit card debt relatively well. Both delinquency and net charge-off rates have been declining for more than a year and are moving closer to pre-pandemic levels. However, recent Philadelphia Fed research cautions that improving aggregate delinquency and net charge-off metrics may partly reflect a shift in originations toward less risky borrowers as large banks credit standards tightened in 2023 and 2024, while financial stress in some households remains elevated.

Refinancing Drives Mortgage Origination Growth but Remains Subdued

Large banks originated nearly 144,000 new first-lien residential mortgages in the second quarter of 2026 - up 15 percent from a year earlier, although still far below pre-2022 levels. The dollar amount of originations in the second quarter of 2026 was $89 billion - about 17 percent of the total market - and first-lien mortgage balances held in large bank portfolios stood at nearly $1.5 trillion.²

Refinance volumes drove year-over-year growth in originations in the second quarter of 2026, although they remained subdued relative to the levels seen in late 2019 through 2021, when mortgage rates hit historical lows. As shown in Figure 3, rate-and-term refinance origination volume was $18.1 billion and cash-out refinance volume was $11.3 billion, increases of 58 percent and 35 percent from a year ago, respectively. On a quarter-over-quarter basis, cash-out refinances grew about 13 percent relative to 2026Q1, as more homeowners tapped into high levels of home equity. However, rate-and-term refinance originations declined about 24 percent from 2026Q1 as mortgage rates rose in the second quarter of 2026.

Large bank home purchase origination volume grew modestly by about 6 percent from a year ago (the larger jump from the first quarter to the second quarter of 2026 mainly reflects seasonal factors). However, home purchase originations still stand at levels generally below historical norms, especially on an inflation-adjusted basis, as existing home sales have been weak. Sales have been hovering around an annual rate of 4 million units, well below typical pre-pandemic levels of over 5 million. Higher mortgage rates have not only restrained housing demand but also generated mortgage "lock-in" that has curtailed the number of homeowners willing to sell their home.

The rate of severe delinquency, defined as 90 or more days past due (accounts-based), on mortgages held by large banks stood at 0.86 percent in the second quarter of 2026. This rate is down from 0.96 percent a year ago and is near a historical low for this data series. Tight credit standards at banks and other lenders over the past decade have contributed to strong loan performance among the existing stock of loans. Moreover, consistent with continued tight underwriting, the 10th percentile credit score for large bank mortgage originations in 2026Q2 was just over 700 and remains above pre-pandemic levels.