The 2025 Credit Card Landscape: Growth, Risk, and Competing Payment Trends

As the United States consumer credit ecosystem continues to evolve post-pandemic, the most recent Consumer Financial Protection Bureau (CFPB) Consumer Credit Card Market Report to Congress (December 2025) paints a detailed picture of where credit cards stand in 2024 and what this means for consumers, lenders, and the broader economy. The credit card market is expanding sharply in nominal terms, with significant shifts in who is driving growth, which products are thriving or contracting, and how alternative financing options, such as buy now, pay later (BNPL), are reshaping payment habits.

This edition of the report reflects data through calendar year 2024 and includes benchmark comparisons to 2022 and earlier years. It highlights the rising role of prime-credit borrowers in spending growth, mounting balances, and fee and interest income levels not seen in recent history. It also documents the contrasting trends in private label credit cards and the fast-growing BNPL sector. Understanding these trends is critical for payments professionals, issuers, regulators, and anyone tracking consumer credit risk.

Credit Card Market Growth and Consumer Behavior

In 2024, consumer credit card purchase volume continued its upward trajectory, reaching $3.6 trillion, up from $3.2 trillion in 2022. This roughly 12.5% increase over two years reflects steady nominal growth and continued reliance on plastic for everyday spending. Importantly, this growth was almost entirely driven by cardholders with prime or higher credit scores. In contrast, cardholders at or below prime saw negligible growth in spending volume despite an increase in their number.¹

Outstanding balances also climbed, breaking through $1.2 trillion, with the average per-cardholder balance at about $5,300 and even higher at $8,700 for prime borrowers.¹ The acceleration of balances suggests consumers are more willing or more compelled to carry debt than in recent cycles, likely influenced by interest rates, inflation pressures, and shifting income dynamics.

From an issuer perspective, this translates into growing interest income (about $160 billion) and fee income (over $31 billion).¹ Notable within fee income is the dominance of late fees, which alone accounted for roughly $17 billion, dwarfing annual fees and pointing to shifting revenue drivers for issuers in a higher-rate environment.

The average Annual Percentage Rate (APR) on general-purpose cards exceeded 25%, the highest in at least a decade, suggesting that consumers carrying balances are paying more for credit than they have in recent history.¹ These elevated rates reflect broader monetary policy conditions, cost of capital pressures on lenders, and competition dynamics around rewards and introductory offers.

Delinquency and Consumer Risk

Delinquency rates offer a window into the sustainability of consumer balances. By year-end 2024, general-purpose credit card delinquencies had returned to near 3%, a level consistent with pre-pandemic norms. Private label card delinquencies were higher, at roughly 3.8%.¹ While these numbers do not signal systemic stress, they indicate that debt levels and repayment pressures are rising as expensive credit becomes more entrenched.

Another noteworthy trend is the share of borrowers making only minimum payments (around 15% for general purpose cards and closer to 20% for private label cards), signaling a segment of consumers relying on cheap liquidity to manage monthly budgets.¹

Private Label Credit Cards: A Product in Retreat?

While the overall credit card market continues to expand, private label credit cards (PLCCs) (store-specific cards typically co-branded between a retailer and a financial institution) have shown a contrasting trend. The CFPB report indicates that private label purchase volume reached approximately $163 billion in 2024, a figure that has remained relatively stable in recent reports, despite a significant increase in overall credit card purchase volume.¹ Open private label card accounts also fell to around $185 million, down significantly from 2018, while open general purpose card accounts climbed to $608 million.¹

This divergence in account growth and volume suggests a relative decline in private label card reach and usage within the consumer credit mix. Industry analyses outside the CFPB indicate that market share has shifted toward general-purpose cards and digital alternatives. A PaymentsJournal examination noted ongoing declines in private label prominence as consumers opt for payment options with broader usability and rewards incentives that store cards often lack.²

This trend reflects broader shifts in consumer behavior and payment preferences. Where private label cards once provided easy store credit and tailored rewards, they are less compelling alongside versatile general-purpose cards and flexible alternatives like BNPL. For retailers, capturing and retaining card usage has become more challenging as the diversity of payment options increases.

The Rise of Buy Now, Pay Later: Mobile-First, Short-Term Credit

Buy now, pay later (BNPL), a form of short-term installment financing that enables consumers to split purchases into multiple interest-free payments, has become an increasingly visible alternative to traditional credit options in recent years.

Although BNPL has historically been underreported in credit records due to gaps in reporting practices, data indicate rapid adoption. A CFPB report on BNPL usage found that 21% of consumers with a credit history financed at least one purchase with BNPL in 2022, and usage has continued to grow among younger demographics.³ A Morgan Stanley survey from April 2025 found that more than one quarter of U.S. consumers reported using BNPL products, and BNPL financed approximately 6% of U.S. e-commerce sales in 2024, up from 2% in 2020.⁴

Additional data shows that BNPL adoption is strongest among Gen Z and Millennials, with users drawn to simple digital checkout integration, interest-free installments, and avoidance of traditional credit costs.⁵ A 2025 survey indicated that roughly 30% of BNPL users make purchases at least once per month, signaling regular usage patterns among a significant subset of consumers.⁶

While BNPL volumes still trail credit card usage in absolute dollar terms, the rate of adoption and integration into retail platforms is notable. Some forecasts project that BNPL transaction volumes in the U.S. will reach more than $100 billion by 2025, with continued growth expected as merchants integrate BNPL options across various categories.⁷

What This Means for the Economy

The combined forces of rising credit card balances, robust interest income, and the rapid uptake of BNPL reflect several underlying economic conditions:

1. Consumer reliance on credit remains elevated. Despite near-normal delinquency rates, the substantial rise in outstanding balances and average lender revenue from interest and fees suggests that households are increasingly relying on high-cost credit to fund consumption and day-to-day expenses.
2. Credit conditions are tightening. The concentration of purchase growth among prime borrowers suggests that consumers with lower credit scores are not expanding spending at the same pace, potentially reflecting tighter underwriting or risk aversion among lenders.
3. Diversification of payment options is fragmenting market share. General-purpose cards continue to dominate, but the slower growth of private-label cards and the rapid expansion of BNPL underscore a shift in how consumers choose to pay. While BNPL does not yet rival card transactions in total volume, its adoption among younger and budget-constrained consumers suggests a long-term structural shift.
4. Regulatory attention and consumer risk profiles are evolving. As BNPL becomes more deeply ingrained in everyday purchases, regulators are starting to pay closer attention. Incorporation of BNPL activity into credit scores, scheduled for late 2025 by FICO models, could bring greater transparency to this growing form of credit and potentially alter consumer behavior.⁸

For issuers, the implication is clear: adapting to diverse payment preferences and understanding where value lies in complex consumer credit portfolios will define competitive advantage. For policymakers, balancing access with consumer protection across both traditional cards and emerging products like BNPL will be essential to sustainable credit markets.

One Random Note: Gaming

Most credit card issuers prohibit users from using their credit cards for gaming (gambling) purposes. Not everyone does, though. A weird note that stood out to us:

gambling spending on credit cards is low but growing—in 2024 it was $2.7 billion, nearly double the $1.4 billion it was in 2019.¹

More debt. Higher rates. More gambling. What could go wrong?

The Great Year-End Review

I spent a lot of time in 2025 writing about ultra-premium cards like the Amex Platinum, Chase Sapphire Reserve, and Citi Strata. With the new year, savvy cardholders now must review what credits they did (or didn’t use), what credits renew for the new year (some are anniversary-based, linked to your card being opened, many are calendar-based), and what changes they must make.

My least favorite task is deciding, each January, whether I want to change my “preferred airline” for American Express. Both the American Express Platinum and Business Platinum cards offer an annual airline incidental fee credit that can help offset part of their hefty annual fees by reimbursing up to $200 per calendar year for certain airline-related charges. 

To trigger this benefit, you must select one qualifying airline at the start of the year and then use your card to pay separate incidental airline fees such as checked bag fees, seat assignment fees, in-flight refreshments, and other airline incidentals that the carrier codes properly. Once those charges post to your account, Amex will issue a statement credit up to the $200 limit; charges that do not qualify include the actual airfare, gift cards, or fees not coded as incidentals by the airline. 

Reflecting on my airline choices.

The Business Platinum version works similarly and ties the selected airline to both the $200 incidental credit and the enhanced 35% Pay with Points bonus for that carrier when booking through Amex Travel each calendar year.

Picking the right airline is essential because only purchases with that one carrier count toward your credit, and different airlines vary in how many incidental fees you’re likely to incur. For instance, flying a carrier where you already get benefits like free checked bags through elite status or co-branded cards might leave you with few incidental fees to reimburse, meaning you could leave value on the table. Instead, choosing an airline where you expect to pay for bags, seat assignments, or lounge passes can help you maximize the full $200 credit each year. 

Over recent years, the structure of this benefit has become more restrictive and focused on incidental charges rather than broader travel credits seen on some competitor cards, and tracking and redeeming the credit now requires careful selection and advance enrollment, given evolving terms and airline coding practices.

I plan to use my Amex points to fly for free, and that 35% bonus is big. But what will I fly? Probably American to Miami for NerdCon - I have to make a bet!

Footnotes

¹ Consumer Financial Protection Bureau. The Consumer Credit Card Market Report to Congress. Dec. 2025. PDF.

² PaymentsJournal. “Private Label Credit Cards Are on the Decline.” PaymentsJournal.com.

³ Consumer Financial Protection Bureau. Consumer Use of Buy Now, Pay Later and Other Unsecured Debt. Jan. 2025. PDF.

⁴ Morgan Stanley Research. “Buy Now, Pay Later Growth Raises Concerns.” Jun. 2025. MorganStanley.com.

⁵ Wikipedia. “Buy now, pay later.” Accessed Jan. 2026. Wi

⁶ Motley Fool Money. “2025 Buy Now, Pay Later Trends Report.” Dec. 2025.

⁷ Wall Street Journal coverage on BNPL adoption and forecasts, including "Buy Now, Pay Later Has Almost a Billion Reasons to Celebrate the Season." 2025.

⁸ Business Insider. “Buy now, pay later loans will soon hit credit scores.” 2025.

CardsFTW

CardsFTW, released weekly on Wednesdays, offers insights and analysis on new credit and debit card industry products for consumers and providers. CardsFTW is authored and published by Matthew Goldman and the team at Totavi, a boutique consulting firm specializing in fintech product management & marketing. We bring real operational experience that varies from the earliest days of a startup to high-growth phases and public company leadership. Visit www.totavi.com to learn more.

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