Subprime Borrowers Drive Card Spending to New Highs

Consumers increased their credit card spending during 2025’s third quarter, according to data from the Federal Reserve Bank of Philadelphia. Aggregate card balances as well as purchase volume grew in the quarter, signaling to issuers that cards remain a crucial payment tool for many U.S. households.

Another finding from the Philadelphia Fed’s report is that the steepest gains in average purchase volume in the third quarter came from cardholders with credit scores below 660. 

And that gains in card purchase volume took place in spite of consumer sentiment measures that had plunged since the start of 2025 and pointed to a more cautious cardholder. The increases in total purchase volume drove that figure to a new high in the data series from the Philadelphia Fed.

Consumers with credit scores under 660 ramped up their credit card spending in the third quarter of 2025.

The overall number of credit card accounts remained largely flat year over year, the Philadelphia Fed indicated, suggesting that a relatively similar number of cardholders started using their cards in the third quarter to complete more purchases.

In addition, the data revealed signs of strength in overall credit performance.

“All card delinquency measures have shown year-over-year improvement during 2025, and net charge-off rates declined in the second and third quarters, reflecting the cumulative impact of several years of tightened access to credit cards for the riskiest borrower segments,” the Philadelphia Fed wrote in commentary it included with its report.

The report from the Philadelphia Fed contains data about credit card use in the recent past, but it carries a great deal of significance in light of current events in the payments arena. 

Earlier this year, President Donald Trump called for a 10% cap on credit card interest rates in a social media post that caught the attention of many in the card industry.

Sen. Bernie Sanders (I-VT) wrote an opinion piece this week reigniting calls for a cap on credit card interest rates. Sanders doesn’t think Trump went far enough. In February 2025, Sanders and Sen. Josh Hawley (R-Mo) introduced bipartisan legislation to cap credit card interest rates at 10%.

The senator believes that a 10% cap on card interest rates should last for a minimum of five years, not one. 

“After that, I believe we should move toward a permanent cap of no more than 15% — similar to the long-standing statutory cap that credit unions have operated under since 1980,” Sanders wrote.

A cap on interest rates could bring savings to cardholders who carry a balance on their credit cards from one month to the next, but it may cause more harm than good.

Sanders believes that a 10% cap on credit card interest rates should go into effect for a minimum of five years.

A 10% cap could significantly weaken the rewards programs and security measures that many people enjoy in their credit cards. Moreover, a cap would also likely take away the ability of many people in the U.S. to even access a card.

Bruce Brenkus, SVP of Risk at Flote, told us that lenders would likely require consumers to have a FICO score of 720 or greater in an environment where they must comply with a 10% cap.

“Consumers with credit scores that are poor, average, or even just the low end of prime will see their access to credit limited,” Rhett Roberts, Co-Founder and CEO of LoanPro, added. “They might be able to find alternatives, like installment loans or BNPL, but there will be a sudden influx of consumers fighting over a smaller supply of credit.”

A 10% cap would likely cause many credit card issuers to lose a significant amount of revenue. But it also may take away a financial tool that many consumers — according to the findings from the Philadelphia Fed report — have relied on heavily in recent months.