Main Street Ledger: Understanding Today’s Credit Card Marketplace — Separating Facts from Fiction
In March, The Century Foundation released a highly produced report on the credit card market, complete with animated graphics, dramatic framing, and a sweeping claim that America is facing a credit card debt crisis. The presentation is slick. The analysis is not. Across the report, The Century Foundation repeatedly mistakes context-free figures for evidence of consumer harm. It treats nominal balances as debt burden, payment behavior as inability to pay, APRs as profit margins, and hypothetical rate-cap savings as real-world consumer benefits. The result is a polished presentation built on shaky analysis.
The facts tell a more measured story.
- Credit Card Balances Are Not Rising as Dramatically as Headlines Suggest
Once inflation and the addition of roughly 39 million new cardholders are taken into account, average credit card balances have remained largely flat over the past decade. - More Consumers Are Paying Their Balances in Full
The share of cardholders paying their balances in full each month is higher today than before the pandemic and higher than it was a decade ago. - Higher Monthly Payments Can Reflect Faster Debt Repayment
Growing monthly credit card payments does not automatically mean consumers are falling behind. In many cases, consumers are paying down balances more quickly and reducing long-term borrowing costs. - Minimum Payments Do Not Automatically Signal Financial Distress
Consumers who make minimum payments are not necessarily unable to pay more. Credit cards often serve as short-term financial tools that help households manage unexpected expenses and income disruptions. - Credit Utilization Is Not a Measure of Consumer Hardship
Using a larger share of available credit may affect a credit score, but it is not direct evidence that a consumer is financially distressed or unable to repay debt. - APRs Do Not Reflect What Most Consumers Actually Pay
Rising advertised interest rates do not tell the full story of credit card costs. Actual consumer costs depend on payment behavior, fees, balances, and broader interest-rate conditions. - Rate Caps Would Likely Reduce Access to Credit
Claims that interest-rate caps would save consumers billions ignore the likelihood that many consumers would lose access to mainstream credit altogether. - Credit Cards Are a Response to Affordability Pressures, Not the Cause
The largest pressures on household budgets are housing, health care, food, transportation, child care, and education. Credit cards are often used to help families manage those costs when income and expenses do not align. - Banks Do Not Profit When Consumers Cannot Repay
Unpaid debt creates losses for lenders, not profits. A sustainable credit card market depends on consumers successfully managing and repaying their obligations.
The Century Foundation’s report looks polished, but its analysis repeatedly fails to account for the facts that matter most. It ignores inflation and millions of additional cardholders when discussing balances. It treats revolving as inability to pay, payment behavior as financial diagnosis, APRs as profit margins, and hypothetical rate-cap savings as real-world consumer benefits.
A better analysis starts with the data. Credit card balances are not rising the way the headline number suggests. More consumers are paying in full than they were a decade ago. Very low payment behavior is lower than it was before the pandemic. Consumers are paying more into their balances. And the major affordability pressures facing families are the essentials — housing, health care, food, transportation, child care, and education — not the regulated credit tools families use to manage those pressures.
There is a more useful conversation to have. The CFPB’s own CARD Act Report shows that many consumers with revolving balances are leaving money on the table because they are unaware of options already available in the market. According to the CFPB, 37 percent of cardholders with a balance are unaware of balance transfers, including 50 percent of Millennials and 61 percent of Gen Zers. At the same time, more than 95 percent of credit card solicitations in 2021 and 2022 featured a zero percent introductory rate for a fee of less than three percent. Importantly and to clarify, zero percent APR transfers do not have retroactive compounding interest—something that some policymakers have confused recently.
That is where a serious consumer-focused agenda should begin. If The Century Foundation wants to help consumers reduce borrowing costs, it should start by educating them about the competitive options already available — including balance transfers and zero percent introductory APR offers — rather than advocating for policies that would restrict access to the very credit products families use to absorb shocks.
Credit cards are not the shock. They are one of the shock absorbers. Sound policy should address the real sources of household affordability pressure while preserving access to the regulated financial tools that help families manage through them.
To learn more, click HERE.
Talk Less, Smile More: Behind Warsh's Communications Gambit
What Happened: New Federal Reserve Chair Kevin Warsh has criticized the Fed's glut of communications for years and used his debut press conference to showcase his own verbal restraint. The question among Fed watchers and former officials is whether this reform effort results in a rightsizing of communications or a return to the "bad old days" of central bank secrecy.
Why It Matters: All facets of Fed communication will be up for review this year. Warsh said he is convening a task force of experts both inside and outside the central to look at how it conveys monetary policy adjustments. Collective statements, forecasts, speeches, and press conferences are all candidates for revision or elimination, pending the group's findings.
Between the Lines: Several changes have already gone into effect with the committee’s official policy statement down to 130 words from the usual 300-400.
- In the summary of economic projections section, Warsh abstained from contribution, citing his long-running issue with the practice and adding in the press conference that he would not provide forward guidance.
What They’re Saying: Former Fed Vice Chair Don Kohn said the challenge in Warsh’s approach is finding the right balance for forward guidance:
"Chairman Warsh is right — the Fed can be too clear, it can lock itself into a course of action too much, and that's not healthy. It's not healthy for the committee, it's not healthy for the markets. So, there's a balance there […] Markets, the public, and the legislature need to understand how the Fed is doing things, why it's doing what it's doing, how it might react to incoming data. Being completely opaque on that is not a good idea and it's not conducive to accountability."
Yes, but: Fed Watchers and former officials like former Fed Vice Chair Alain Blinder are not sure if the reform effort will result in streamlined communications or a return to the “bad old days” of central bank secrecy.
"More than 30 years ago, the Fed was totally unreceptive to the argument that it should communicate coherently, and that has changed a lot over the [past] 30 years, and I would hate to think that we're going back to the bad old days. I don't know that we are […] We don't know nearly enough yet."
Dive Deeper: To read more, click HERE.
Lenders Ramp Up Scam Defenses
What Happened: Due to an increased volume of scams targeting older customers, financial institutions are investing in new strategies to fight fraud and scams.
Why It Matters: Emerging technologies like AI have enabled fraudsters and scammers to become more sophisticated in the ways that they are taking advantage of consumers.
Yes, and: Fifth Third has expanded its scam investigations team, due to the increased volume of reported scams and the time involved in addressing them, said Kris Edwards, the bank’s head of fraud prevention. The bank declined to detail the number of recent hires, but Edwards said Fifth Third has established a dedicated scams program team and continues to hire.
- The Cincinnati-based regional is also increasing its detection strategies to better spot signals and identify scams as they’re happening, Edwards said in a recent interview.
By the Numbers: Financial institutions have seen major increases in bank impersonation scams and fraud payments. Last year, adults aged 60 and older reported losses of about $7.7 billion, up 59 percent since 2024 according to FBI data.
What They’re Saying: Edwards told Banking Dive earlier this year that Fifth Third has seen a “dramatic rise” in bank impersonation scams, where a fraudster impersonates the lender to trick a customer into parting with their money. Scams impersonating a government entity or tech support are also common.
“I’d rather spend the time calling out, ‘Hey, we’re seeing some signals that you may be participating in a scam,’ [where, historically, a lot of the bank’s efforts have been focused on outreach afterward] I’d rather get out in front of that and place our resources there.”
Looking Back: Earlier this month, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued updated guidance to clarify how financial institutions can share information with each other about suspected fraud under section 314(b) of the USA PATRIOT Act.
- FinCEN’s updated guidance clarifies that a financial institution may share information about activity involving suspected fraud, money laundering, terrorist financing, or other specified unlawful activities, and that it may share that information with any other financial institution eligible to participate in the section 314(b) program to identify illicit financial activity.
Dive Deeper: To read more, click HERE.
The K-Shaped Economy has Impacted Dealmaking
What Happened: In the dealmaking world, the K-shaped economy is encouraging companies and investors to seek wealthier clients.
Why It Matters: It's not a new strategy, but companies and investors are focused on seeking even wealthier clients.
By the Numbers: Real spending growth for high-income households has increased by 7.6 percent between 2023 and March 2026, while low-income households’ real spending only increased by about one percent according to the NY Fed, pushing investors and companies to shift their focus to deals on premium goods and services.
What They’re Saying: Companies and investors are aiming to keep up with the trend with Nestle CEO Philipp Navratil saying:
"Demand is becoming more polarized, with some families seeking value while others trade up for superior quality. This is a must-win trend for us.”
Between the Lines: Companies are already pursuing different deals based on the K-shaped economy while more affordable goods struggle to sell.
- Last year, Unilever signed a $1.2 billion deal for gummy supplements company Grüns which charges $54.40 per 28-day supply and Pepsi acquired premium tortilla company Siete for $1.2 billion.
- However, pizza chains, a symbol of affordable quick dinners, have struggled, with several chains set to sell.
Yes, and: This trend has expanded beyond consumers into logistics, fintech, and infrastructure.
- New credit cards focused on the ultrawealthy like Atlas are emerging. Atlas offers white-glove services with a $1,000 annual fee and hit a $420 million valuation earlier this year.
The Bottom Line: Even if no dealmaker is touting a "K-shaped" investing strategy, the theme is suffusing the investing world.
Dive Deeper: To read more, click HERE.
The Week Ahead
📅 June 30, 2026, at 10 a.m.
U.S. House Financial Services Committee: Markup of Various Pending Bills
Washington, D.C., and Virtual
📅 June 30, 2026, at 10 a.m.
U.S. House Appropriations Financial Services and General Government Subcommittee: Oversight Hearing - U.S. Office of Management and Budget
Washington, D.C., and Virtual
What We’re Reading
- Associated Press: All 32 of the nation’s biggest banks clear the Fed’s annual ‘stress test’
- American Banker: Fifth Third injects AI into its mobile app
- BankingDive: KeyBank bets on relationships over tech budgets
- POLITICO: The Trump official trying to cut a crypto deal that could crack down on Trump
- Reuters: SoFi deepens AI-powered trading ambitions with Composer deal
