Charge-Off Rate on Credit Card Loans

Credit card charge-offs are the end of the line for unsecured consumer debt. The delinquency has hardened into a pattern, the collections calls have run their course, and the bank has removed the balance from its books as uncollectable.

The rate sat at 1.63% in Q4 2021 — an all-time low, driven by stimulus payments that let households catch up on accounts that otherwise would have defaulted. By Q3 2024 it had climbed to 4.69%. It's eased slightly since, to 4.11% in Q4 2025, but remains at a level not sustained since 2011.

The mechanics are straightforward. Credit Card Delinquency led the charge-off rate by roughly 6 to 9 months — accounts 30-60 days late today are mostly charged off inside a year if they don't cure. The 60-Day Line at 3.03% and the Large-Small Bank Spread at 3.68 points both tell us where the losses are being booked: disproportionately at the largest card issuers, who built the decade's subprime growth.

Credit card charge-offs are running seven times higher than the 0.61% All-Loan Charge-Off rate. That gap between cards and everything else is where this cycle's household distress is concentrated. Mortgage charge-offs are at zero. Corporate loan losses are contained. The credit card statement is where the damage is landing.