The news: 30-day delinquencies modestly rose to 0.74% last September, marking the first YoY increase in two years, per VantageScore. Delinquencies also increased MoM, following seasonal patterns.

How we got here: Consumers are under financial pressure. Inflation persists—particularly for gas—and the Federal Reserve has resumed raising interest rates. 

To cope, consumers appear to be putting fewer charges on their credit cards: Average balances fell from $6,490 in August to $6,450, per VantageScore.

While consumer sentiment remains dour, per the University of Michigan’s Consumer Sentiment Index, stable delinquency rates and healthy spend suggested US adults were staying on top of their finances. One month of data—and a relatively slight YoY—is hardly a sign that consumers are at a breaking point. But it’s not good news, either, particularly as markets expect another rate hike from the Federal Reserve by the end of the year. Credit card interest rates are already back at the highest since Q3 2025, per the Fed.

Recommendations for payment providers: As the holiday season approaches, both payment providers and merchants need to give proper incentives to encourage spending from discouraged US consumers.

• Buy now, pay later providers can use interest-free promotions during peak shopping periods to give consumers more payment flexibility for gift purchases—and capture more payment volume.
• Issuers should roll out promotions on their financial media networks personalized to cardholder shopping behavior to encourage discovery through their app.

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