US Banks Carry $325B in Unrealized Losses as Credit Card Debt Hits $1.26T

• US credit card debt rose $21 billion to $1.26 trillion in Q2, nearing the record high as consumer borrowing continues to climb
• US banks are carrying $325.1 billion in unrealized securities losses, up $19 billion from the previous quarter, according to the FDIC
• Rising delinquencies add to the pressure, with credit card and auto loan delinquencies remaining high, even though the banking system is profitable and well-capitalized

Americans are putting more on their credit cards even as a separate pressure point remains on US banks. Credit card debt climbed by $21 billion in the second quarter to roughly $1.26 trillion, according to the New York Fed. This further pushed balances close to last year’s record. At the same time, banks continue to carry hundreds of billions of dollars in unrealized securities losses.

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Credit Card Debt Moves Back Toward Record Territory

The latest New York Fed data revealed that US credit card debt is at $1.26 trillion. This is up 1.7% from the previous quarter. It is just below the record $1.28 trillion reached in the fourth quarter of 2025. At the same time, the latest delinquency data shows the share of credit card balances 90 or more days past due has climbed sharply. It reached levels near the highs seen in the early 2010s. The rise suggests that some borrowers are leaning more heavily on revolving credit while struggling to keep up with repayments.

Meanwhile, the total household debt slipped by $13 billion to $18.8 trillion, making the rise in revolving debt stand out. Other forms of borrowing also moved higher. Auto loan balances increased by $28 billion to $1.71 trillion. Amidst this, home equity lines of credit rose to $459 billion. Mortgage and student loan balances declined during the quarter.

The concern is not entirely about Americans using credit cards and more about how much of that borrowing is becoming difficult to repay. The New York Fed said new delinquencies on credit cards and auto loans remain elevated, although overall delinquency rates have been relatively stable.

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US Banks Still Hold $325 Billion in Paper Losses

On the banking side, the FDIC reported $325.1 billion in unrealized losses on securities in the first quarter, an increase of $19 billion from the previous quarter. The figure covers both available-for-sale and held-to-maturity securities.

Those losses are tied mostly to the market value of securities bought when interest rates were lower. They are also not the same as realized losses. A bank does not take a loss simply because the market value of a security has fallen.

This matters because the US banking system remains profitable and well-capitalized. FDIC-insured institutions reported $80.5 billion in aggregate net income during the first quarter. Meanwhile, the FDIC said capital and liquidity levels remained strong.

But rising consumer borrowing and continuous unrealized losses give investors another reason to watch the financial sector closely. Currently, these developments reveal slight stress and not a whole banking breakdown.

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