Consumer lending is being reshaped by economic shifts, digital innovation, and evolving borrower behavior. Here’s what defined last year – and what borrowers might expect in 2026.  

As we move further into 2026, the consumer lending landscape continues evolving amid a changing rate and regulatory environment. Credit balances are climbing, financial behaviors are changing, and while interest rates are easing, they remain elevated compared to pre-pandemic levels. These factors influenced how consumers approached borrowing, managed debt, and made financial decisions throughout the year.

At PNC, we’re closely tracking these developments to better understand their impact on our customers and communities. Here’s a look at the key themes from the past year and what they could mean for consumer borrowing this year.  

Looking Back: Lending Trends That Shaped 2025

A few key themes emerged this past year:

Interest Rates Stayed Elevated

While inflation began to cool, the Federal Reserve maintained a cautious stance, keeping borrowing costs well above pre-pandemic levels. As a result, credit card balances continued to climb — reaching $1.23 trillion in Q3.[1]

“Higher rates have prompted many consumers to take a closer look at how they manage debt,” said Jeff Hofmann, Head of Retail Lending at PNC. “Even with potential rate relief on the horizon, it’s a smart time for consumers to revisit their credit strategy — whether that means exploring consolidation options, refinancing where it makes sense, or simply rethinking how borrowing fits into their broader financial goals.”

An Evolving Credit Card Landscape

Many credit cards became more expensive, with higher annual fees offset by enhanced perks and features tailored to today’s consumers. At the same time, new types of cards are emerging with customized rewards, advanced digital features, and stronger security. These shifts reflect a broader move toward tech-driven, consumer-centric products. Expect even more innovation and competition throughout 2026 – giving consumers more choices, but also more to consider when picking the right card.

"Consumers are navigating a more dynamic credit card market than ever before,” noted Ronnie Allan, PNC’s Head of Consumer Credit Card and Personal Lending. “As products evolve to offer richer rewards and smarter security, it's important for consumers to choose cards that align with their lifestyle and financial goals – not just the perks.”

Personal Loans as Strategic Tools

Personal loans shifted from emergency lifelines to strategic financial solutions. Borrowers increasingly turned to them to consolidate debt and fund major life events, integrating them into broader credit and cash flow strategies. Notably, originations across all major credit products increased in 2025, indicating broader consumer demand for credit[2].

“If interest rates continue to fall, personal loans could become even more appealing in 2026,” said Allan. “But it’s important for lenders to help consumers fully understand the long-term impact of their borrowing decisions.”

Hofmann added: “At PNC, we’re committed to helping our clients make informed financial decisions in any rate environment – whether they’re applying for a credit card, consolidating debt, or simply planning for the future.”

Looking Ahead: What Could Shape Lending in 2026

Several dynamics could define the borrowing landscape this year. Here’s what consumers could expect across loans, credit cards, and personal finance as we move through 2026.

Easing Interest Rates

The Federal Reserve is widely expected to continue lowering interest rates. While this may lead to more favorable terms on products like personal loans, credit cards, and auto loans, consumers should be cautious. A lower Fed rate doesn’t always translate directly into lower borrowing costs, and headlines about rate cuts can sometimes create unrealistic expectations. With rates still higher than pre-pandemic levels, it’s important to compare offers carefully and focus on the total cost of borrowing—not just the monthly payment.

Credit Card & Personal Loan Growth Continues

Consumers are likely to continue leaning on credit cards and personal loans, especially for everyday expenses or debt consolidation. But lenders will keep a close eye on delinquencies, which have been inching up.

“Think of rate cuts as an opportunity to reassess if consolidating or paying down debt makes sense,” Allan recommends. “Even a small drop in interest rates can make a difference – but the right move depends on their goals and overall financial picture.”

Tech-Driven Personalization

Lending will continue to become more digitally empowered and personalized, and consumers will increasingly turn to self-service platforms, intelligent alerts, and integrated financial tools to guide borrowing decisions. But not all tools are created equal – so it’s important to pair technology with trust.

While digital tools can help consumers compare loan options and track interest rate changes, not all third-party platforms source data accurately or in real time. Working with a reputable financial institution offers a distinct advantage. Banks not only provide trusted guidance but also have a deeper understanding of a client’s overall financial picture, allowing them to deliver advice that is more personalized, reliable, and aligned with long-term goals.

“Digital tools are great for convenience, but they’re not a substitute for trusted advice, and a bank can provide both,” Allan said. “Working with a trusted financial institution ensures the insights clients rely on are accurate and tailored to their specific needs.”

Inflation May Cool – But Budgets Will Stay Tight

While inflation is expected to cool this year, prices for essentials like groceries and rent may remain elevated. Combined with a potential softening in the job market, household budgets will likely stay under pressure.

“Despite these changing dynamics, the fundamentals remain the same: manage debt wisely, spend intentionally, and maintain strong credit habits.” Hofmann said.

Smart Borrowing Tips '26

As consumers navigate the evolving lending landscape, aligning borrowing strategies with emerging trends can help maximize financial flexibility and minimize risk. Here are some ways to borrow smarter this year:

  • Stay alert and make the most of lower rates. Interest rates can shift quickly. Keeping tabs on market trends – and consumers’ own credit health – can help them spot good opportunities to refinance or adjust their borrowing strategy.  Even a small drop in rates can lead to noticeable savings over time.
  • Borrow with care. Credit cards and personal loans will still be widely used, but lenders are watching for signs of financial strain. Before taking on new debt, consumers should make sure it fits their budgets and serves a clear purpose – not just a short-term fix.
  • Leverage digital tools – but start with trusted sources. Apps and online platforms can be powerful tools to help consumers track rates and compare options, but quality and accuracy can vary. Consumers should begin with resources from their trusted financial institutions to ensure the information is accurate and relevant to their goals.
  • Build a cushion for the unexpected. With household budgets likely to stay tight and the job market potentially softening, having even a small emergency fund can help consumers avoid turning to credit when life throws a curveball.

The Bottom Line

This year could mark a turning point in consumer lending. While borrowing may become more affordable, smart credit habits will matter more than ever. PNC remains committed to providing insights, tools, and guidance to help customers navigate this dynamic landscape with confidence and clarity.