The Other Banks
Credit card delinquency at smaller community banks
What is the current The Other Banks?
Credit card delinquency at banks outside the top 100 — community banks, regional lenders, and credit unions — stood at 6.4% in Q1 2026, according to Federal Reserve data. This is more than double the 2.94% delinquency rate at the nation's 100 largest banks, exposing the structural divergence in credit performance across the banking system. The gap of roughly 3.68 percentage points has persisted since 2017 and reflects which borrower segments are concentrated outside the top-tier banks. Source: Federal Reserve.
Behind the headline banking numbers, a parallel credit system serving smaller communities is showing far deeper distress.
Credit card delinquency at banks outside the top 100 — community banks, regional lenders, and credit unions — stood at 6.4% in Q1 2026, according to Federal Reserve data. That runs well above the rate at the nation's 100 largest banks. The persistent gap reflects two fundamentally different lending environments operating within the same economy.
The divergence isn't new, but it has persisted at elevated levels since 2017 when small bank delinquency surged from around 3% to over 5%. Plastic Ceiling shows total credit card debt at elevated levels — but the risk is not evenly distributed. Smaller banks serve borrowers who are less likely to qualify for prime rates at major institutions, meaning they're carrying debt at even higher effective interest rates than the average tracked by The Card Tax.
This indicator is a canary in two senses. First, it shows stress among the most financially fragile borrowers before it shows up in headline numbers. Second, it reveals risk in the banking system itself: smaller institutions have less capacity to absorb losses. Falling Behind shows the aggregate delinquency rate continuing to climb, but that average masks a story of deeply uneven stress.
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Is this happening to you?
Do you carry a credit card balance from month to month?
How has The Other Banks changed over time?
Most affected counties
Counties with the highest delinquency scores in the County Distress Index.
Explore all 3,144 counties →| Period | Value | YoY Change |
|---|---|---|
| Q1 2026 | 6.43% | −0.8 pts |
| Q4 2025 | 6.6% | −0.5 pts |
| Q3 2025 | 6.74% | −0.7 pts |
| Q2 2025 | 7.06% | −0.7 pts |
| Q1 2025 | 7.18% | −0.6 pts |
| Q4 2024 | 7.14% | −0.7 pts |
| Q3 2024 | 7.45% | −0.1 pts |
| Q2 2024 | 7.77% | +0.3 pts |
| Q1 2024 | 7.79% | +0.5 pts |
| Q4 2023 | 7.86% | +1.0 pts |
| Q3 2023 | 7.55% | +0.7 pts |
| Q2 2023 | 7.43% | +1.4 pts |
Frequently Asked Questions
How does credit card delinquency differ between large and small banks?
Credit card delinquency at banks outside the top 100 was 6.4% in Q1 2026, more than double the 2.94% rate at the nation's 100 largest banks. The gap of roughly 3.68 percentage points reflects which borrower segments concentrate outside the top tier.
Why is small bank delinquency so much higher?
Smaller banks serve borrowers who are less likely to qualify for prime rates at major institutions. These borrowers carry debt at even higher effective interest rates and have thinner financial buffers, leading to higher default rates.
Why does the large-vs-small bank gap matter?
The gap reveals that headline delinquency averages mask deeply uneven stress. It also flags risk in the banking system: smaller institutions have less capacity to absorb losses than the largest banks.
Is the gap between large and small bank delinquency widening?
The divergence has persisted at elevated levels since 2017, when small bank delinquency surged from around 3% to over 5%. The gap has remained wide since, suggesting a structural rather than cyclical separation.
Where does the large vs. small bank delinquency data come from?
The Federal Reserve publishes delinquency rates separately for the 100 largest banks and all other banks based on quarterly Call Report filings. This allows comparison of credit performance across different bank tiers.
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