OpinionDrafted with AI assistance and reviewed by our editors. Sources linked below.
'Consumer spending is strong' and 'card debt is $1.26 trillion' are the same story
A Forbes analysis finds spending resilient and household finances strained at the same time. Both are true. The question for any household is which side of that split it's on. Not financial advice.
Two headlines have been running side by side all month. One says American consumers are still spending, and the card networks’ earnings prove it. The other says credit-card balances are near a record. Forbes’s Mayra Rodríguez Valladares put them in the same piece on October 26, and the result is more useful than either headline alone.
Her reading: spending is resilient but uneven. American Express and Visa reported strong results. Discount retailers gained as shoppers hunted for value. Card balances stood at $1.263 trillion in the second quarter, up $54 billion from a year earlier, according to the New York Fed. The aggregate data, she writes, don’t point to a broad credit crisis — but stress is growing among riskier borrowers. The share of new large-bank card accounts going to people with credit scores below 660 rose from 16.1% to 18.5%.
Two economies, one statistic
The reason both headlines are true is that “the consumer” is not one person. CNBC reported on October 12 that older Americans’ wealth may be a big part of what’s keeping spending strong: median net worth for families headed by someone 75 or older rose 37% between 2022 and 2025, and net transfers from investments to checking accounts equalled 6.8% of spending in April 2026, up from 3.5% in April 2019.
Put those together and the picture is clear. Households with assets are spending from them. Households without are spending on cards, and a growing share of new cards is going to people with weaker credit. The average hides a widening gap.
The number that reassures, and the one that doesn’t
The reassuring figure is in the New York Fed’s own August release: credit-card delinquency transition rates “remained steady,” and the broad data show balances actually fell slightly from the prior quarter. People are, on the whole, paying.
The figure that doesn’t reassure is the subprime share. A rise from 16.1% to 18.5% of new accounts is modest in a single quarter and meaningful as a trend: it means lenders are extending credit further down the score range at a time when rates on that credit are high. That’s where the “strong spending” of the next year is being borrowed from.
What this means for a household
Nothing in this piece is financial advice, and we can’t see your statement. But the framing we’d offer is this: the national headline tells you nothing about your own balance sheet, and the only number that matters is which side of the split you’re on.
If your spending is coming from income or savings, “resilient consumer” is you, and the card is a tool. If your spending is coming from the card, a revolving balance at today’s rates is the most expensive money most people will ever borrow, and it’s the first thing to attack — before investing, before the emergency fund is full. The economy can be fine and your household can be stretched at the same time. This month’s data say that’s exactly the situation for a growing number of people.
