US consumer credit shows signs of stability as borrowers manage debt responsibly

Halfway through 2025 and US consumer credit is showing early signs of stability and measured growth.

The newly released Q2 2025 Credit Industry Insights Report from TransUnion highlights disciplined borrowing, moderating balance growth, and declining delinquencies across several major lending categories, suggesting that many households are adapting successfully to an uncertain economic environment.

While credit card and unsecured personal loan originations have increased, their pace of balance growth has slowed, and late payment trends are moving in the right direction.

Following a sharp decline in Q1 2024, bankcard originations rebounded in Q1 2025 with a 4.5% year-over-year increase, while outstanding balances rose by the same percentage in Q2, well below the double-digit gains of recent years.

Notably, the level of 90+ days-past-due delinquencies fell by nine basis points year-over-year, the first such improvement after years of steady increases.

“We’re increasingly seeing the credit card lending market return to pre-pandemic patterns,” says Jason Laky, executive vice president and head of financial services at TransUnion. “Originations experienced their most significant year-over-year growth since 2022, while balance growth normalized to more historical levels. At the same time, delinquency rates declined, signaling that despite ongoing economic uncertainty, consumers continue to demonstrate resilience.”

In the unsecured personal loan sector, originations jumped 18% year-over-year in Q1 2025 to 5.4 million accounts, with growth coming from both super prime and subprime borrowers. Balances hit a record $257 billion in Q2, while the 60+ DPD delinquency rate edged down to 3.37%, marking a third consecutive quarter of year-over-year improvement.

“Consumers appear to be increasingly successful at adapting to today’s economic realities,” says Michele Raneri, vice president and head of US research and consulting at TransUnion. “While many are still relying on credit to manage everyday expenses, the data suggests they’re doing so in a controlled manner. The continued decline in delinquencies and charge-offs reflects a level of financial discipline that speaks to consumers’ flexibility and determination to stay on track.”

Mortgage activity also saw modest gains, with originations up 5.1% year-over-year in Q1, driven by a rebound in refinancing and home equity lending posted its strongest growth since 2022.

However, mortgage delinquencies ticked higher, reaching 1.27% for 60+ DPD loans, nearing pre-pandemic norms.

“Amid ongoing uncertainty surrounding tariffs and broader economic policy, the Federal Reserve has maintained a steady interest rate stance in 2025,” says Satyan Merchant, senior vice president, automotive and mortgage business leader at TransUnion. “Some forecasts anticipate a potential rate cut in the second half of 2025, which would likely lead to a decline in mortgage rates. If paired with housing inventory returning to pre-pandemic levels, this could stimulate increased mortgage origination activity.”