The tail end of last year saw a spike in borrowing as rising prices hit consumers hard.
New personal loans rose by 24% in the third quarter of 2025 when compared to a year earlier, driven by borrowers with the lowest credit scores, while new credit card accounts spiked by 11.7%, with strong growth from both subprime and superprime consumers, according to new data out Thursday from TransUnion.
“People are turning to credit as we continue to see stubbornly high inflation,” Michele Raneri, vice president and head of US research and consulting at TransUnion, told Yahoo Finance.
Though inflation now appears to be cooling, prices are nonetheless up significantly from pre-pandemic levels — about 26% higher last month than in January 2020. Average hourly earnings have increased in turn, but consumer sentiment last year was markedly negative as Americans felt burned by ballooning costs and a stagnant job market.
“Just because the inflation number has come down during this quarter doesn’t mean it hasn’t accumulated behind it,” Raneri said.
Read more: How to protect your savings against inflation
As more Americans seek lines of credit to cope, an increasing number are falling behind on payments. The Federal Reserve Bank of New York’s most recent report on household debt found 12.7% of credit card balances were 90 days or more overdue in the fourth quarter of 2025, the highest level since 2011.
TransUnion, meanwhile, found that credit card balances grew 4.2% at the end of last year, a growth rate that held for the fourth quarter in a row.
Personal loan balances — despite being at a record high of $276 billion — are roughly flat, at about $8,400, compared to 2024 levels when averaged across all accounts.
Moving forward, credit card origination volumes — people seeking new accounts — are expected to moderate in 2026, according to TransUnion’s forecast.
“Our anticipation is that everything is kind of settling down,” Raneri said.
Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at emma.ockerman@yahooinc.com.
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