Credit Card Charge-Off Rate - Historical Chart
Charge-Off Rate on Credit Card Loans, All Commercial Banks. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series CORCCACBS. Shaded areas = NBER recession dates. Updated 2026-03-09.
What the Q4 2025 Data Shows
At 4.11%, the credit card charge-off rate in Q4 2025 is above the 10-year average of 3.40% by 0.71pp. The trend is downward, with decreases in 3 of the last 4 quarters.
The credit card charge-off rate (FRED series CORCCACBS) measures how much money banks are losing on credit card accounts that defaulted. Because credit cards are unsecured, there is no collateral to seize -- making charge-offs on cards typically the highest of any major loan category.
Banks generally charge off credit card accounts after 180 days of non-payment, per FDIC guidelines. At that point the account is written off as a loss, although the bank may later recover some amount through collections or by selling the debt to a third-party buyer at 5-15 cents on the dollar.
Credit card charge-offs are a direct measure of consumer financial distress. The series dates back to 1985 and shows distinct patterns around recessions, with the sharpest spikes occurring when unemployment rises rapidly.
What This Metric Measures
This page tracks the annualized percentage of credit card loans at all commercial banks that have been written off as uncollectible. The data comes from the Federal Reserve Bank of St. Louis FRED database, series CORCCACBS, updated quarterly.
Historical Context
The all-time peak was 10.54% in Q4 2009 — roughly 2.6x the current level. The all-time trough was 1.63% in Q4 2021. During COVID-19 in 2020, the reading hit 3.78% (Q2 2020). Year-over-year, the metric has moved -10.3%.
Why It Matters
Card charge-offs are the single largest source of credit losses at major consumer banks. JPMorgan, Citi, Capital One, and Discover all report card charge-offs as key earnings metrics. Rising losses squeeze profit margins and force banks to set aside more capital in loss reserves.
For consumers, rising charge-offs mean banks will tighten approval standards, reduce credit limits on existing accounts, and raise APRs to compensate for higher expected losses. The effect cascades: consumers lose credit access, cut spending, and the economy slows.
Bank Lending Standards: Tightening
The Federal Reserve's Senior Loan Officer Opinion Survey (SLOOS) shows that 8.9% net of domestic banks tightened standards for C&I loans to small firms in Q1 2026. Banks have now tightened for 15 consecutive quarters. When banks tighten, businesses that cannot qualify for traditional loans often turn to merchant cash advance products with effective APRs of 60–350%.
What This Means for Business Owners
Falling charge-offs are encouraging — fewer borrowers are falling behind, and credit conditions may loosen. But if you are still carrying expensive debt, an improving aggregate number does not change your individual cash flow.
Charge-Off Rates by Loan Type - Q4 2025
Charge-off rates across all major loan categories at U.S. commercial banks:
| Category | Current | Prior Period | Year Ago | Change |
|---|---|---|---|---|
| Business Loans | 0.55% | 0.57% | 0.51% | 0.02pp ↓ |
| Credit Cards ★ | 4.11% | 4.18% | 4.58% | 0.07pp ↓ |
| Real Estate | 0.08% | 0.10% | 0.12% | 0.02pp ↓ |
| Consumer Loans | 2.81% | 2.89% | 2.98% | 0.08pp ↓ |
| All Loans (total) | 0.58% | 0.62% | 0.65% | 0.04pp ↓ |
Source: Federal Reserve FRED. All rates seasonally adjusted. ★ = primary focus of this page.
Credit Card Charge-Off Rate - Frequently Asked Questions
The credit card charge-off rate is 4.11% as of Q4 2025, per FRED series CORCCACBS. This is the annualized rate of card balances written off at all U.S. commercial banks.
Credit cards are unsecured -- there is no house or car to repossess. When a cardholder defaults, the bank recovers only what it can collect through collections agencies or debt sales, typically 5-15 cents on the dollar.
The all-time peak was 10.54% in Q4 2009 during the Great Recession. At that level, banks were losing roughly $10.54 per $100 of card balances annually.
Delinquencies lead charge-offs by about 2 quarters. A card that goes 30 days past due today will typically be charged off 180 days later if the cardholder never cures. Rising delinquencies today forecast higher charge-offs ahead.
The rate moved down by 0.07pp from Q3 2025 to Q4 2025. The trend is downward, with decreases in 3 of the last 4 quarters.
FRED series CORCCACBS, from the Federal Reserve Board of Governors quarterly Charge-Off and Delinquency Rates release. Covers all FDIC-insured commercial banks. Seasonally adjusted.