Americans’ credit card balances in 2026 are expected to increase by the smallest annual amount since 2013, excluding the first year of the pandemic when relief programs helped consumers avoid greater financial pain, according to a new report from TransUnion.
How can that be when prices are rising and consumers report feeling pretty awful about the economy?
Credit card balances are far higher than where they were several years ago, but yearly growth is cooling from the massive spikes seen in 2022 and 2023 — increases of 18.5% and 12.6%, respectively. Next year is expected to see annual growth of 2.3%, with balances hitting $1.18 trillion, TransUnion said in its 2026 consumer credit forecast.
Following the rush of post-pandemic spending, lenders became more cautious about extending credit access.
“Five, six years ago, people got a lot of stimulus money, people had accommodations on their credit, and people weren’t able to go shop, so they had a lot of cash flow,” Michele Raneri, head of US research and consulting at TransUnion, told Yahoo Finance. “That cash flow resulted, from a credit perspective, in a lot of really low delinquencies across the board.”
Then: whiplash. Spending jumped, but so did delinquencies. That’s now stabilizing, with delinquencies expected to remain relatively flat next year.
“This might be the end of the cycle, where people are spending again and paying their bills and refreshing their outlook to what it was before the pandemic,” Raneri said.
There’s also the much-discussed K-shaped economy, where people with higher incomes or better credit scores are doing well, and those with less money and lower credit scores are faring worse, leaving fewer people in the middle.
Learn more: What is a K-shaped economy, and what’s causing the divide?
“There are people who are doing really well, probably carrying the economy, and there’s a lot of them,” Raneri said. “And there are people, from a credit perspective, that have slid down in credit quality so that’s kind of leaving the middle a little bit shy of what it usually is.”
Auto loan delinquencies, which are projected to grow slightly for the fifth consecutive year in 2026, according to TransUnion, are also gaining at a slower rate compared to previous years. Personal loan delinquencies may similarly tick up next year, but not by much compared to the surge seen in 2022.
Overall, consumers appear to be pretty resilient despite headwinds from the labor market and prices, though Moody’s noted in its consumer credit health tracker released this week that aggregate data showing “broadly solid” household balance sheets “likely understates consumer debt burdens in the lower deciles of the wealth spectrum.”
