A 10% APR and fee-free rent dangle may not justify the new maze of spend requirements.

US consumers’ rejection rates for new lines of credit hit a series high of 24.8%, up from 23.1% in June, while application rates remained stable (excluding credit card limit applications, which increased), per the Federal Reserve Bank of New York’s SCE Credit Access Survey. As issuers tighten the purse strings for working-class consumers, buy now, pay later (BNPL) have an opportunity to steal market share. Integrating their buy buttons at point-of-sale (POS) and marketing their BNPL debt cards can help reach these consumers where they shop.

Federal student loan borrowers may be prioritizing student loan repayments ahead of their credit cards and personal loans as the threat of wage garnishment creeps closer, per a TransUnion survey. Issuers need to offer products to help mitigate additional stress for embattled younger consumers, through expanded card-linked installment options that help cardholders avoid lofty interest rates as they pay down debts.

10.7% of consumers with student loans were 90+ days delinquent in the last six months in April 2025, per a FICO report. Issuers should take note that 54% Gen Zers are already using credit products to navigate stress from student loan repayment, per FICO. If economic conditions worsen, credit card delinquencies could also begin to rise in tandem with student loan delinquencies.

Consumer prices in August rose at a faster pace than in July, while a weak jobs report showed rising unemployment, per the Bureau of Labor Statistics. This unsavory combination points to the Federal Reserve cutting interest rates at its September meeting next week. For customers, this is a double-edged sword. On one hand, a rate cut could make borrowing more affordable, potentially lowering the cost of mortgages, auto loans, and credit card debt. This could be a much-needed reprieve for households facing rising prices for everyday goods. On the other hand, savers would lower the interest they earn on savings accounts and certificates of deposit, and banks trying to offer the most competitive rates will be risking higher deposit costs. While lower rates might spur some demand for new loans, the primary impact will be a squeeze on banks’ profitability.

The news: The average VantageScore credit score dropped one point since last month, meaning the average customer’s creditworthiness is declining. And there are other signs of credit stress that should be alarming to banks. Our take: With the average credit score dropping and delinquencies rising across all tiers—including among historically reliable superprime borrowers—financial institutions (FIs) are facing a higher-risk environment. This requires a proactive approach to risk management. FIs should tighten their underwriting standards—particularly for mortgages and auto loans, which are showing the largest increases in late payments. In addition, FIs must proactively engage with customers to help prevent delinquencies from turning into defaults. By using data to identify at-risk borrowers and reinforce customer loyalty, FIs can reach out with support and resources like loan modifications or personalized financial guidance.

The news: Sixty-four percent of Gen Z and 65% of millennial homebuyers say their financial well-being will depend on their ability to refinance to a lower interest rate in the future, per Truework’s “The State of Homebuying in America” report. But if rates don’t significantly drop over the next few years, these customers’ mortgages could be at risk of defaulting. Our take: Financial institutions (FIs) can step in to help young homeowners navigate their mortgages while they await rate changes. FIs can start by offering automated refinance alerts, enhancing digital transparency and providing a homeownership/homebuying educational hub.

In today’s episode of The Banking & Payments Show podcast, we talk about the most (and least) impactful ways that the new Trump administration might impact the banking sector, and the unintended consequences on mortgage rates and the mortgage industry if tariffs raise the cost of consumer goods and construction materials. Join the discussion with host and Head of Business Development, Rob Rubin, economics correspondent at Politico, Victoria Guida, and our Principal Analyst, Tiffani Montez.

Traffic is up at Aldi and Lidl: With the cost of rent, car insurance, and electricity continuing to rise, consumers are looking to save on groceries.

Borrowers struggling with inflation and rising interest rates can pay just the interest on their loans for up to six months—with no implications.

The tech gap exacerbates the underserved cohort’s financial risk. Collaborating with digital challengers could change that.

It will focus on existing clients and aid minority communities—but will that be enough to repair its image?

We look at how the tanking pound and growing economic uncertainty are affecting UK banks.

Some are calling the program designed to help Black and Hispanic families achieve home ownership ‘predatory lending.’

Macroeconomic and geopolitical concerns are forcing Canadian financial institutions to address issues surrounding consumer financial health, US acquisitions, and a potential fintech flameout. In the long term, open banking, digital transformation, and omnichannel personalization will pose unique challenges.