Lydia Wedlock, editorial assistant, The Credit Union Connection
As we head into the final months of 2025, consumers across the country continue to worry about inflation and the impact of tariffs on their wallets. However, despite the many challenges that everyday people face, credit card debt has decreased over the past several months. Credit card holders are staying strong and continuing to spend for now, but the challenge will be to keep debt down if the economy and inflation levels continue to be rocky.
Credit Card Debt on the Decline
According to the latest Fed Rate Survey from WalletHub, as of Q2 2025, the projected credit card debt growth for the quarter is around 34% less than the increase that occurred around the same time last year. Total credit card debt is projected to be around $1.31 trillion on an inflation-adjusted basis, which is about 13% below the record high. Since the Fed has cut rates by 25 basis points, credit card users will likely save around $1.91 billion in interest over the next year.
Spending Growth Remains Slow
As economic uncertainty grew over the summer, so did more of a reluctance from credit card users to spend. According to the August Payments Index from Velera, debit purchases increased 6.2%. The same could not be said for credit card purchases, which grew 1.6%. The same can also be said for transactions for both types of cards, with debit transactions going up 4.1% and credit transactions going up 1.6%.
What’s clear is that worries about inflation and the well-being of the economy are at the forefront of consumers ‘ minds when it comes to consumer spending, and this will, in turn, affect levels of credit card debt. As the impact of tariffs and rising prices becomes more apparent, it will be important for credit unions to reach out to members who are struggling financially and find ways to support them so they can continue to get the things they need without falling into debt.
What Comes Next for Credit Cards?
Unemployment has become another challenge credit card holders have to deal with. The job growth numbers for August, reported by the Bureau of Labor Statistics, were not great to say the least. This will be another area for credit unions to watch and be prepared to aid affected members.There’s also the time of year we’re entering to take into consideration. It may only be September, but the holiday shopping season has already begun. Many consumers have made it clear that they plan to spend less on gifts this year, especially Gen Z. For credit unions, this means that they need to get their holiday plans rolling now. Because early holiday shoppers are closely watching their wallets, this is the perfect time to provide resources to help prevent members from falling into debt while picking out the perfect gifts for everyone on their lists.
As of right now, the future of credit card spending and debt is uncertain. There are signs that the financial situations of many credit card holders are improving. Still, external factors such as inflation and a slowing economy could dampen efforts to reduce debt further. If credit unions and their card-holding members hope to weather the coming financial storm, the time to provide resources and support is now, ahead of the holiday shopping season, and to get all their gifts before tariffs raise prices any further.