Synchrony’s Q3 Shows Strength, Not Strain, as Consumers Hold the Line

Today’s economy remains oscillating between resilience, restraint and a hopeful rebound.

This makes few barometers of consumer health as revealing as their spending habits, and puts Synchrony, the country’s largest private-label credit card issuer, squarely at the junction of retail spending, household liquidity and credit confidence.

Synchrony’s third-quarter 2025 earnings, released Wednesday (Oct. 15), revealed a nuanced but encouraging picture of consumer health. Borrowers are meeting obligations, adjusting behavior to higher rates and maintaining credit discipline across income tiers. Retail spending has shifted toward value and necessity, but it has not collapsed.

“Synchrony’s third quarter performance was highlighted by a return to purchase volume growth, driven by stronger spend trends across all five of our platforms, and continued strength in our credit performance,” Synchrony President and CEO Brian Doubles said in press release.

“Our purchase volume growth was driven by improving trends across credit grades and generations,” Doubles added, “reflecting the resilience of our customers and the compelling utility and value that Synchrony provides as they navigate the continued uncertainty in the broader environment.”

On Wednesday’s investor call, Chief Financial Officer Brian Wenzel characterized the results as evidence of “resilience in core drivers.”

Translation: the consumer has normalized, not weakened. Average active accounts are rebounding, purchase volume is positive again, and credit metrics are improving. In Wenzel’s framing, this is not the top of a credit cycle but the stabilization phase after two years of volatility.

Read more: Earnings Season Sheds Light on State of Subprime Consumers

A Clearer Signal on the Consumer

Synchrony reported net earnings of $1.1 billion, a 37% increase year over year, with earnings per share rising to $2.86 from $1.94. Behind those gains lies a picture of cautious but improving consumer behavior. Purchase volume across its platforms grew 2%, reversing two quarters of stagnation. More telling, the company’s delinquency and charge-off rates declined, indicating that borrowers, across income and credit tiers, are adjusting to tighter monetary conditions with surprising discipline.

Net charge-offs fell to 5.16% of average loan receivables, down 90 basis points from last year, while loans 30-plus days delinquent dropped to 4.39%. Those levels remain below pre-pandemic norms, a notable achievement given that the industry as a whole has been bracing for credit deterioration as savings buffers erode.

Synchrony’s loan receivables slipped 2% to $100.2 billion, suggesting that while consumers continue to borrow, they are not expanding balances aggressively. The net interest margin widened 58 basis points to 15.62%, evidence that lending profitability remains intact even as growth moderates.

In essence, consumers are paying on time, maintaining manageable balances, and using credit selectively, a sign of health rather than stress.

The firm’s data show that average active accounts began rising again in Q3, after a decline earlier in 2025. That rebound, driven by improved trends “across credit grades and generations,” reflects a re-engagement by consumers who had temporarily pulled back. Synchrony’s numbers suggest that the U.S. household has reached a new equilibrium—less exuberant than 2021-22, but more stable than 2023’s retrenchment.

See also: Synchrony: Consumers Becoming ‘More Thoughtful About Spending’

Spending Patterns Beneath the Headline

A special preview of PYMNTS Intelligence data reveals that general purpose credit cards remain the overwhelmingly preferred payment method across consumer buying contexts. In non-grocery retail, nearly half of all consumers (47.9%) use traditional credit cards and 23.1% use debit cards. That’s nearly two-thirds of consumers.

Synchrony’s five business platforms provide a granular map of consumer priorities. The Digital portfolio, which includes eCommerce partners and FinTech integrations, posted 5% purchase volume growth, the strongest among segments. Consumers continue to favor online channels, demonstrating that digital convenience and rewards-based incentives remain powerful motivators even in cautious times.

The Diversified and Value segment grew 3%, reflecting strong performance from mass-market retailers and “out-of-partner” spending — transactions beyond the primary retail brands on Synchrony’s cards. This pattern underscores a value-oriented consumer mindset: households are still buying, but with heightened price sensitivity and a shift toward discount and mid-tier outlets.

By contrast, the Home and Auto and Lifestyle platforms contracted 1% and 3%, respectively. Those declines mirror national data showing softer demand for big-ticket goods as consumers delay major purchases amid high financing costs. The Health and Wellness segment, however, rose 3%, supported by spending in pet care and elective health services, areas less elastic to economic swings. Together, the platform mix points to a consumer prioritizing essentials, experiences with perceived utility, and digital convenience.

Even with these strengths, Synchrony’s loan receivables fell 2% year over year. Some of that decline stems from tighter underwriting, but part reflects voluntary deleveraging by consumers. Households appear intent on keeping balances manageable, a behavior reinforced by elevated interest rates on revolving credit, which now average more than 21% nationally.