If you’ve been holding off on a mortgage refinance, a 0% balance transfer, or a new card because you assumed banks were about to slam the door shut, they aren’t. This week’s Q2 earnings from Wells Fargo, Bank of America, and JPMorgan Chase said the opposite. Consumer credit is quiet. It got quieter last quarter. Apply now.
What the banks actually said
Wells Fargo reported on July 15. Its net loan charge-off rate came in at 34 basis points, down 10 basis points from a year ago. Mike Santomassimo, the CFO, told analysts on the call that consumer delinquency trends “have been better than the company modeled throughout the year, with no meaningful deterioration by FICO score or income cohort.” That’s banker-speak for “no wave, at any income level.”
Bank of America reported the same session. CFO Alistair Borthwick said consumer card charge-offs and delinquencies improved both year over year and quarter over quarter. Non-performing loans held stable at about $5.8 billion. The bank booked a modest reserve release, which is what a lender does when the future looks better than its model told it to expect.
Brian Moynihan, BofA’s CEO, said in the same call that “consumers remain resilient as average deposit investment balances and spending all showed linked quarter increases.”
JPMorgan, which gets the deepest look into US credit card behavior of any bank in the country, reported a credit card delinquency rate of 0.86% and a charge-off rate of 1.54%. Both are ordinary numbers. Neither is a warning flare.
Why this matters if you’re carrying a balance
Two things. First, the reason to pay down a 22% APR balance was never the macro. It was the 22%. Nothing this week changes that. Keep going.
Second, if you had planned to shift that balance onto a 0% intro APR card, or into a lower fixed-rate personal loan, and were waiting for the “right moment”, the moment is now. When banks aren’t stressed, approvals aren’t tightening and intro offers aren’t quietly getting shorter. When banks are stressed, both happen fast.
Same story if you were about to apply for a mortgage, a refi, or a HELOC. Underwriting is where a scared bank protects itself. A confident bank writes the loan.
What to do this week
Pull your credit report and check your score. If you’re above 720, you’re in the prime pool the CEOs were talking about. Shop your options. A couple of hard pulls in a two-week window won’t tank you.
If you’re actually struggling, that’s a different call, and a real one. When charge-offs are low, banks have room to be flexible with individual hardship programs, structured payment plans, and APR reductions on request. Ask. The worst answer is no, and it costs you a phone call.
What not to do
Do not read a calm quarter as a green light to add debt for the sake of it. Nothing here says your budget got easier. It says the credit door is open. Those are two different things.
File this one under “here’s what they don’t tell you when they run a scary headline.” Consumer credit is not on fire. The people whose job is to lend you money just told the market that, in writing, on the record.
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