As the stock market remains volatile amid the aftermath of President Donald Trump’s so-called “Liberation Day” tariffs, consumer spending has not been significantly impacted, at least not yet. During quarterly earnings calls, credit card companies offered strong outlooks in regard to consumer spending, but many have taken measures to mitigate losses amid a potential economic downturn.
As President Donald Trump’s trade policies have contributed to stock market unrest, the fallout from his so-called “Liberation Day” tariffs has yet to hit the quarterly financial reports of the country’s largest lenders where consumer spending patterns are often first to emerge
Earnings reports for credit card companies remained strong as consumers borrowed, spent, and opened credit cards more so than the year prior.
“The consumer continues to be resilient and discerning in their spend,” Citigroup’s chief financial officer Mark Mason said during the company’s quarterly earnings call last week. Mason also emphasized a revised consumer sentiment.
“We’ve seen a shift towards essentials and away from travel and entertainment,” Mason said.
JPMorgan Chase reported a 7% increase in credit- and debit-card spending year-over-year, but noted people were carrying elevated credit-card balances. Additionally, Bank of America outlined a 4% bump in credit- and debit-card spending from a year earlier coupled by a decline in late payments from loan holders over the previous quarter.
Despite positive growth, major credit card companies are preparing for an economic downturn and delinquencies are already rising to their highest level in five years.
“The focus right now is on the future, which is obviously unusually uncertain,” JPMorgan Chase finance chief Jeremy Barnum said during the bank’s most recent earnings call on April 11.
As JPMorgan holds the risk of a recession at 60%, the bank added to its rainy day funds in case of any future losses by increasing its allowance for credit losses (ACL) by $973 million, bringing its net reserve total to $27.6 billion.The ACL acts as a buffer to cover those losses if customers don’t pay their credit card bills.
Additionally, the company allocated $3.3 billion into its loan loss provisions— a 73% increase from the $1.9 billion issued to combat unpaid loans from a year prior. JPMorgan also maintains $1.5 trillion in cash and marketable securities.
JPMorgan did not immediately respond to Fortune’s request for comment.
In addition to JPMorgan, Citi is maintaining security if an economic downturn happens. The bank increased its cost of credit by more than 15% from the year before to $2.7 billion.
Additionally, Citi boosted its total reserves by $1 billion in the first quarter, from $21.8 billion to $22.8 billion, seeking security if the U.S. economy goes south. The bank also maintains a strong liquidity and capital position with cash levels reaching $960 billion.
Citi did not immediately return Fortune’s request for comment.
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