Americans turned to new credit cards and personal loans last year as higher prices burned

Core Insights - There has been a significant increase in borrowing due to high inflation, with new personal loans rising by 24% in Q3 2025 compared to the previous year, particularly among borrowers with low credit scores [1] - Credit card accounts also saw an increase of 11.7%, with growth observed in both subprime and superprime segments [1][2] - Despite signs of cooling inflation, prices remain approximately 26% higher than pre-pandemic levels, affecting consumer sentiment negatively [3] Borrowing Trends - The Federal Reserve Bank of New York reported that 12.7% of credit card balances were 90 days or more overdue in Q4 2025, the highest level since 2011 [4] - Credit card balances increased by 4.2% at the end of last year, maintaining this growth rate for four consecutive quarters [4] - Personal loan balances reached a record high of $276 billion, remaining stable at about $8,400 per account compared to 2024 levels [5] Future Outlook - Credit card origination volumes are expected to moderate in 2026, indicating a potential stabilization in borrowing activity [5] - The overall sentiment suggests that the borrowing environment is settling down, despite the previous spikes in credit demand [5]