2025 in review: Credit cards had another banner year in 2025. Total credit card transaction value hit $3.841 trillion, per our forecast—surging 3.3% YoY. Total US household debt, meanwhile, reached $1.23 trillion in Q3 2025, up $24 billion QoQ, per the New York Fed data.

Let’s take a closer look at the defining credit card trends of 2025:

1. The mega-merger.

• Capital One acquired Discover in May 2025, making Capital One the largest credit card issuer and sixth-largest bank by assets. With its own network, Capital One started transitioning its debit card users onto Discover and anticipates shifting credit cardholders in the near future. This shake-up for the card network space may in the short term widen Visa’s dominance over Mastercard, as many of Capital One’s soon-to-be converted products run on Mastercard. 
• The merger also stands to rejigger the network hierarchies: If Discover absorbs a significant portion of former Mastercard products, the network could surge past American Express, which processed $1.102 trillion in network transaction volume this year—roughly one-third of Mastercard’s and one-seventh of Visa’s volumes, per our forecast.

Our take: The results of Capital One’s merger with Discover will take time to fully materialize. Critically, Capital One must increase international acceptance of Discover products to maintain its travel rewards credit cards’ value for cardholders.

2. Premium refreshes and launches.

• American Express, Chase, and Citi refreshed or launched new premium products over the course of 2025, sparking a luxury credit card arms race of the most elite perks to secure cardholder loyalty from the wealthiest US households. Annual fees spiked to record highs: Amex’s Platinum Card now boasts an $895 yearly price tag. 
• Premium competitors rolled out enhanced dining, entertainment, and travel rewards, intent on wooing upwardly mobile millennials and Gen Zers. Experiential and exclusive rewards connected with these cardholders as they looked for value and status with their cards.

Our take: With the wealthiest 10% of US households driving half of US consumer spending, up from roughly a third in the 1990s, per Moody’s, the clamor for wealthy cardholders is intensifying. Gaining top-of-wallet status for these consumers will be crucial for securing valuable interchange fees and bigger-ticket volume more commonly purchased by these cardholders. 

3. Lower and middle-class households are getting boxed out from credit line access.

• While wealthy US adults find themselves highly catered to by issuers, working- and middle-class US adults are contending with tighter underwriting. Rejection rates are ticking upward for credit applications, hitting a series high of 24.8% in October, per the Federal Reserve Bank of New York’s SCE Credit Access Survey. Forty-two percent of consumers doubted that they would be approved for a credit card, per a report from i2c and PYMNTS.
• Where are these consumers flocking? Buy now, pay later (BNPL). US BNPL payment value has surged 19.2% YoY, per our forecast, as more consumers pile into easier-to-access alternative credit. And it’s easier than ever to use: integrations with Apple Pay and launches of BNPL-enabled debit cards from Klarna, Affirm, and Zip drove volume, reflected by BNPL’s strong representation in Cyber 5 sales.

Our take: As issuers eschew average US adults’ credit applications, outsiders like BNPL have the opportunity to make inroads with overlooked consumers. 

If the subprime credit market becomes less competitive post-Capital One and Discover’s merger, players like Cash App Afterpay, Klarna, and Affirm stand to pick up even more volume as consumers flock to alternatives.