JPMorgan Sees Stabilization in Credit Trends Amid Ongoing Interest Rate Pressures

JPMorgan's credit trends for its consumer portfolio improved in the second quarter of 2026, indicating a potential stabilization of card losses. The bank's Card Services net charge-off (NCO) rate decreased to 3.34% from 3.47% in the first quarter and 3.40% a year earlier.

This improvement is significant because it suggests that credit normalization may be on track, contrary to concerns about consumers adjusting to higher borrowing costs and accumulated debt.

Card activity remains healthy, with debit and credit card sales volume rising 10% year over year, supporting Card Services net interest income in the second quarter.

However, it's uncertain whether this trend will continue, as elevated interest rates are expected to keep borrowing costs high and put pressure on debt-servicing capacity, particularly for financially strained card borrowers.