Writer: Eric Bank
Editor: Lillian Guevara-Castro
Reviewer: Adam West
Key Takeaways
- Subprime credit card originations rose 15.2% year over year, indicating renewed lender confidence.
- Average new credit card lines dropped to $5,923 in Q2 2025 from $6,204 year over year as issuers tighten limits.
- Unsecured personal loan delinquencies among subprime borrowers fell from 14.4% to 13.6% year over year.
TransUnion’s latest Credit Industry Insights Report shows a 15.2% year-over-year jump in subprime credit card originations for Q1 2025 — the second straight quarter of gains. The trend hints at a calculated push by lenders to reengage riskier segments amid steady improvement in repayment trends.
In Q2 2025, credit card balances rose 4.5% year over year — a relatively tame increase compared to prior surges. Despite economic headwinds, serious delinquencies (90 or more days past due) dropped nine basis points from last year to 2.17%.
Stability in the Credit Card Market
Total card originations rose across all tiers in Q1, breaking a seven-quarter streak of stagnation. The broader credit environment is now marked by more predictable rates and a lukewarm resurgence in consumer demand.
Notably, average debt per borrower hit $6,473 in Q2 — up modestly from $6,329 a year earlier. The number of consumers carrying a balance also rose to 173.5 million, up from 170.1 million.
Personal loans are seeing even sharper momentum. Originations climbed 18% year over year in Q1, with subprime and super prime tiers both pushing that growth. Among subprime borrowers, delinquency rates on loans 60 or more days past due dropped from 14.4% to 13.6% year over year.
The total outstanding personal loan balance reached a new high: $257 billion in Q2. Meanwhile, the number of consumers with personal loans rose to 24.8 million, and the average account balance held fairly steady at $8,524.
Subprime expansion isn’t limited to credit cards and loans. FHA-backed mortgages — a common channel for subprime borrowers — accounted for 35% of all first mortgage delinquencies in Q2 2025.
First mortgage delinquencies overall increased to 1.27%, creeping toward levels last seen before the pandemic. In auto lending, 2024 originations from prime and below-prime borrowers posted elevated delinquency rates, although annual growth in that segment has slowed to single digits.
Even charge-offs showed improvement: The number of charged-off credit card accounts fell 9% from Q2 2024. These combined metrics suggest borrowers are holding a steadier footing, even as they continue to rely on credit lines to stay afloat.
“The continued decline in delinquencies and charge-offs reflects a level of financial discipline that speaks to consumers’ flexibility and determination to stay on track.” — Michele Raneri, vice president and head of U.S. research and consulting at TransUnion
Lenders appear to be applying more precise risk filters while still casting wider nets, particularly in product categories that had seen retrenchment in prior quarters.
Looking at the bigger picture, the market shows signs of cautious expansion. Issuers are returning to subprime lending with tight reins — tighter terms, but a clear intent to grow.
On the consumer side, behavior appears to be improving. Appetite for credit is rising. Lenders are watching repayment patterns more closely. That means more borrowers may get another shot, but they’ll be under a sharper lens.
“Delinquency rates declined, signaling that despite ongoing economic uncertainty, consumers continue to demonstrate resilience,” said Jason Laky, EVP and head of financial services at TransUnion.
