The news: Despite economic shocks, consumers are largely maintaining resilience, per the New York Fed’s Household Debt and Credit report.

• Total credit card debt outstanding fell, and the total number of credit card accounts plateaued for the quarter.
• Transitions into delinquency for credit cards trended down from 8.7% in Q4 2025 to 8.6% in Q1 2026.
• And total delinquent balances across all debt ticked down from last quarter, though they are up on the year.

Zooming out: US households have been rattled by economic headwinds, especially as the war in Iran wears on.

• The national average price of gas has risen to $4.53, up nearly $1.54 since the last week of February, per AAA.
• The Consumer Price Index rose 3.8% YoY in April, the fastest rate in three years. Grocery prices rose 2.9%, electricity costs increased 6.1%, and gasoline prices jumped 28.4%, per the US Bureau of Labor Statistics.
• Meanwhile, added pressures of resumed student loan payments have caused many US adults to delay major financial decisions like home and car purchases, per an Empower study.

Why this matters: Delinquency and debt metrics are improving. However, the flattening of new originations signals that either US adults are wary of taking out new credit lines during economically uncertain times or that they simply cannot access new credit products due to tough issuer underwriting.

• A net 2% of lenders said they tightened their credit card lending standards in Q1, per the Federal Reserve’s Senior Loan Officer Survey—after more than three years of consecutive tightening.
• But demand has also turned against issuers: Net issuers reporting stronger demand fell to -6% for credit cards, -9.8% for auto loans, and -12.7% for all other loans.

Implications for issuers: Current underwriting standards may be freezing out lower- and middle-income US adults who still want to access credit as payment providers target affluent customers with more profitable premium products.

As the K-shaped economy drives a rift in consumer spending, incumbents risk forfeiting younger consumers with larger lifetime earnings potential to rising incumbents like Chime, SoFi, and Cash App that have capitalized on fast and easy access to small-dollar lending and other financial services that those consumers prioritize.

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