Cardholder metrics improve as the issuer takes on Apple’s outsize subprime borrowers.

JPMorgan buys the $20B portfolio at a discount, inheriting risks but gaining a unique opportunity.

Bread Financial reported $188 million in net income in its Q3 2025 earnings—roughly flat on the year—while revenues fell 1% to $971 million. Co-brand issuers need to diversify their portfolios to withstand economic downturns and sector-specific slowdowns. However, issuers need to consider what’s going on in potential new sectors. Home goods likely is a low-growth choice based on current outlooks into the housing market, while more resilient industries may be a better play during economic uncertainty.

The effects of the Capital One-Discovery merger are still coming into relief, two quarters after the deal exploded the size and scope of Capital One’s business. If issuers continue to reorient their investments strictly to their premium offerings, subprime cardholders will become increasingly stranded for lines of credit from incumbents. This gives an opening for fintechs and buy now, pay later platforms to snag this population, as traditional lenders back away from credit-thin consumers in pursuit of wealthy spenders.

The news: The average VantageScore credit score dropped one point since last month, meaning the average customer’s creditworthiness is declining. And there are other signs of credit stress that should be alarming to banks. Our take: With the average credit score dropping and delinquencies rising across all tiers—including among historically reliable superprime borrowers—financial institutions (FIs) are facing a higher-risk environment. This requires a proactive approach to risk management. FIs should tighten their underwriting standards—particularly for mortgages and auto loans, which are showing the largest increases in late payments. In addition, FIs must proactively engage with customers to help prevent delinquencies from turning into defaults. By using data to identify at-risk borrowers and reinforce customer loyalty, FIs can reach out with support and resources like loan modifications or personalized financial guidance.

Digital wallets’ transformation into commerce enablers speeds up. We make a case for digital-only consumer credit cards. And we see a new threat that BNPL poses to credit cards.