The great American credit card spending spree is cooling off—but not because consumers are suddenly flush with cash. TransUnion's newly released 2026 Consumer Credit Forecast projects credit card balances will grow just 2.3% year-over-year, the smallest annual increase since 2013 (excluding the pandemic-induced decline of 2020).

The forecast paints a picture of a consumer base that's reached its limit after years of inflation-driven debt accumulation. With balances expected to reach $1.18 trillion by year-end 2026 and average APRs still hovering above 22%, many households are shifting from expansion mode to consolidation.

The Numbers Behind the Slowdown

TransUnion's projections reveal several key trends:

  • Credit Card Balances: Expected to reach $1.18 trillion by end of 2026, up from $1.16 trillion in 2025
  • Delinquency Rates: Forecast to remain virtually flat, with 90+ day delinquencies at 2.57% (up just 1 basis point)
  • New Account Originations: Expected to stabilize as lenders maintain cautious underwriting standards

The near-flat delinquency projection is notable. After rising steadily from pandemic lows, serious delinquency rates appear to be plateauing as lenders tighten standards and consumers become more selective about new debt.

A Bifurcated Consumer Landscape

Perhaps the most significant finding in the TransUnion data is the growing divide between different segments of the consumer population. The American consumer is no longer a monolith—there are two distinct financial realities playing out simultaneously.

For higher-income, super-prime borrowers: Financial health remains robust. The percentage of consumers in the lowest-risk super-prime tier has grown to 40.9% in Q3 2025, up from 37.1% in Q3 2019. These households have benefited from asset appreciation, strong wage growth in professional sectors, and the ability to lock in low mortgage rates before 2022.

For lower-income, subprime borrowers: The picture is considerably darker. With credit card APRs above 22% and wage growth that has failed to keep pace with cumulative inflation, many households find themselves in a high-interest squeeze. Every month of carrying a balance digs the hole deeper.

This bifurcation explains how consumer spending can remain resilient even as credit stress indicators rise—the top 40% of households are doing the heavy lifting while the bottom 40% struggle.

Auto Loans: The Other Red Flag

While credit card trends show stabilization, the auto loan market continues to flash warning signs. TransUnion projects auto loan delinquencies (60+ days past due) will reach 1.54% in 2026, marking the fifth consecutive year of increases.

The auto market faces a particularly challenging dynamic:

  • Average monthly car payments have surged to $750, according to Cox Automotive data
  • The average new car loan now requires 38 weeks of median income to pay off
  • Subprime auto delinquencies hit 6.65% in late 2025—higher than during the Great Recession

For many households, the car payment has become the budget-breaking expense, crowding out discretionary spending and contributing to credit card reliance for everyday purchases.

What This Means for the Economy

The slowing pace of credit expansion carries both risks and reassurances for the broader economy.

On the positive side, consumers voluntarily pulling back on borrowing suggests a degree of financial prudence that could prevent a more severe credit crisis down the road. Better to slow gradually than crash suddenly.

On the concerning side, consumer spending accounts for roughly 70% of U.S. GDP. If households are tapped out and unable to increase borrowing, spending growth will depend entirely on income growth—which remains modest for most workers.

The Federal Reserve's anticipated rate cuts could provide some relief by lowering credit card APRs, but the effect will be gradual. With the Fed projected to cut rates by just 50-75 basis points in 2026, don't expect dramatic changes in borrowing costs.

Strategies for Navigating 2026

For consumers carrying credit card debt, the message from this data is clear: now is the time to focus on paydown rather than accumulation. Consider these strategies:

  • Balance Transfer Cards: Many issuers still offer 0% APR promotional periods of 15-21 months. Transferring high-rate debt can provide breathing room to attack principal.
  • Debt Consolidation Loans: Personal loans typically carry lower rates than credit cards, potentially saving thousands in interest.
  • Negotiate with Issuers: In a tighter lending environment, card companies may be willing to lower rates or offer hardship programs to retain customers.
  • Avoid New Debt: The temptation to use cards for everyday expenses should be resisted where possible. Every new purchase at 22% APR digs the hole deeper.

The Bottom Line

TransUnion's 2026 forecast reveals an American consumer who has hit pause—not because finances are suddenly healthy, but because there's simply nowhere left to go. With credit card balances near all-time highs and APRs stubbornly elevated, the slowest growth since 2013 is less a sign of restraint than exhaustion.

For the economy, the next year will test whether consumer spending can be sustained by income growth alone. For individual households, 2026 may be the year to prioritize debt reduction over discretionary purchases. The credit party is winding down—the question is whether it ends with a soft landing or something harder.