American consumer credit conditions underwent notable shifts between late 2025 and early 2026. In particular, credit card balances, repayment performance, and alternative financing usage all exhibited meaningful changes during this period. These developments have drawn close attention from lenders, policymakers, and market participants assessing household financial resilience.
At the same time, signs of moderation began to emerge in certain stress indicators, suggesting that consumer credit conditions were not deteriorating uniformly. While pressure on household balance sheets remained evident, adjustments in lending practices and borrower behavior contributed to partial stabilization in some segments.
Credit Card Charges at All-Time High
Record-high borrowing charges on credit cards were also recorded in late 2025. According to LendingTree, Federal Reserve data indicated that the average rate on credit card accounts reached 21.39% in Q3 2025. For accounts carrying revolving balances, the average applied charge climbed further to 22.83% during the same period.
It has been noted that credit card APRs have nearly doubled in the past decade. Average applied charges were measured near 12.9% in 2013, compared with approximately 22.8% by 2023. This steep rise, which was fueled by successive rate hikes, has left consumers contending with the highest credit card borrowing costs on record. As a result, a larger share of household income has increasingly been absorbed by credit card borrowing expenses.
Credit Card Debt Peaks Again
A record level of credit card debt has now been reached in the United States. Outstanding balances rose to $1.233 trillion in the third quarter of 2025. This figure is $24 billion higher than the prior quarter and is the highest credit card balance recorded since tracking began in 1999. Now, about 60% higher than their pandemic-era trough of $770 billion in early 2021, within just four years.
The average american credit card debt varies significantly by generation. Generation Z (ages 18–27) holds an average balance of $3,456, Millennials (ages 28–43) holds $6,932, and Generation X (ages 44–59) holds the highest average balance at $9,557. These figures illustrate how the surge in national credit card balances has translated into heavier debt burdens among older working-age consumers.
Credit Card Delinquencies on the Rise
An increasing portion of credit card debt has fallen into delinquency. By early 2025, roughly 14.1% of outstanding credit card balances were over 30 days past due. The share of credit card debt in delinquency increased in ten consecutive quarters leading up to 2025, signaling persistent pressure on household cash flow and balance-sheet resilience.
Although delinquencies are still high, the rate of increase has eased. Quarterly growth, which averaged over 3% in 2022–23, slowed to roughly 1.5% by early 2024. Some stabilization in delinquency trends has also been noted by lenders. This moderation was reflected in national data showing overall rates holding around 2.98% by mid-2025 according to Federal Reserve figures.
Buy Now, Pay Later Booms Amid Holiday Spending
A surge in Buy Now, Pay Later (BNPL) usage was evident during the 2025 holiday season. Emarketer reported that in November, BNPL services facilitated $10.1 billion in online spending, a 9% increase year-over-year. On Cyber Monday alone, BNPL accounted for about 7% of all U.S. online sales (roughly $1.03 billion), the highest ever share for this payment method.
The rapid expansion of BNPL is projected to continue. The number of U.S. users of these services is expected to jump by 34.5% in 2025. BNPL spending is forecast to grow about 19% this year and another 14% next year. Wider availability of BNPL at retailers, combined with tight household finances, has been steadily driving more consumers across the country to embrace these interest-free installment options.
Consumer Credit Growth Expected to Slow
Consumer debt growth appears to be cooling. TransUnion projects credit card balances to rise by only 2.3% in 2026, the smallest annual increase since 2013. Total card debt is projected to reach around $1.18 trillion by the end of 2026, up just slightly from about $1.16 trillion at end-2025. This modest outlook contrasts with the double-digit surges in credit card debt seen in 2022 and 2023.
Repayment trends are expected to remain fairly steady. Serious credit card delinquencies, accounts 90+ days past due, are projected to stay around 2.57% through next year, with tighter lending standards and careful account management helping to keep defaults under control. This cautious approach suggests that even as economic pressures persist, consumers and lenders are approaching credit more warily going into 2026.
Balancing Risk and Resilience Ahead
Taken together, the trends observed from late 2025 through early 2026 point to a consumer credit environment marked by elevated pressure but growing adaptation. Record credit card balances, higher borrowing costs, and earlier rises in delinquency reflected meaningful strain on household finances. Meanwhile, while the slowdown in deterioration, tighter lending standards, and shifting consumer behavior signaled emerging stabilization.
Looking forward, consumer finance conditions are expected to remain constrained. Specifically, slower debt growth and steadier repayment performance suggest a gradual rebalancing rather than a sharp escalation in credit stress.
