Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
Key Takeaways
- Consumers are uncertain: Half of Americans now describe themselves as financially rudderless and report that economic unease is prevalent.
- Demand for help is growing: More consumers are seeking assistance from nonprofit credit counselors, which could soon require additional relief from lenders to borrowers.
- Lender risk is increasing: Growing uncertainty demands ongoing monitoring and mitigation measures.
About half of U.S. adults say they are constantly treading water financially, and 53% say something always comes up to set them back, according to the National Foundation for Credit Counseling (NFCC) 2025 Financial Literacy and Preparedness Survey.
Half of those surveyed report feeling financially adrift. This increased tension coincides with rising interest rates and a stubbornly high inflation that puts further pressure on over-stretched households. From the lender’s side of things, these are concerning indicators.
Budgets at home are under pressure and remain more susceptible to sudden financial shocks. This is a problem for lenders and banks, since it translates to more expected delinquencies, higher unpaid balances, and greater hesitation to borrow — particularly among lower-income and younger consumers.
Financial uncertainty also skews borrowing and spending patterns. Job instability or flat wages may not be enough to explain behavior alone; consumer attitude now plays a much larger role. That can influence the use of credit cards, demand for loans, and borrower reaction in unpredictable ways.
Subtle distress signals today may presage systemic problems down the line. Institutions waiting for delinquencies to develop may be too late to curb losses early. Borrower sentiment metrics — such as the NFCC insights — need to influence underwriting and servicing algorithms now, not later.
Frazzled Consumers and Shifting Borrower Behavior
One-third (33%) of Americans surveyed report they are just getting by financially. Fifty-seven percent agree that the current uncertainty in the U.S. economy makes managing or paying off debt more difficult.
Under growing financial pressure, consumers shift their focus to priority expenses such as rent/mortgage, groceries, and utilities ahead of revolving debt repayment.
While some consumers cut back on taking out new credit facilities, others may shift to more expensive products, including payday loans or buy now, pay later (BNPL) borrowing. That generates demand-side shifts and higher risk exposure for lenders.
Credit cards are usually where that shift first appears. While historically high balances linger, confidence in repayment is declining.
That creates a dilemma for issuers: How do you protect portfolio performance without restricting access to those borrowers who may be in a temporary tight spot?
Risk Management and Collections
Conventional credit models may not be enough anymore. Scores in isolation do not always pick up on early signals of trouble. Lenders may increasingly be forced to use other data — such as patterns in cash flow, account activity, and employment indicators — to create a more complete risk picture.
It is about prevention — intervening before a payment is missed, not afterward.
Proactively identifying vulnerable borrowers is now of paramount importance. It may mean doing soft inquiries on credit, deeper payment behavior research, or investing in predictive software based on AI. It is about prevention — intervening before a payment is missed, not afterward.
Collection methods also need to shift with the times. Plans that impose strict repayment schedules or that use aggressive tactics risk distancing borrowers in the current environment. Institutions that offer hardship relief, flexible payment plans, or not-for-profit alliances may avoid charge-offs and retain long-term relationships.
Nonprofit Partners and Industry Collaboration
Only 5% of Americans with debt problems seek a counseling agency for assistance. Financial institutions stand to gain by closely collaborating with these nonprofits to build early intervention channels.
National Foundation for Credit Counseling CEO Mike Croxson said in a press release:
“As the survey makes clear, it’s often a reflection of the deep uncertainty consumers face today. Good intentions aren’t enough when the economic ground feels unstable. That’s why the steady, expert support from NFCC Certified Credit Counselors can make such a meaningful difference for people in these uncertain times.”
Joint referral programs, co-branded educational tools, and hardship support options can lower risk while showing a socially responsible attitude. These are not purely altruistic gestures — they’re smart portfolio stabilization strategies.
Industry associations and regulators also have their part to play. Financial literacy gaps persist and can be alleviated by public–private campaigns that can promote consumer resilience and lessen systemic vulnerability.
The NFCC data is clear: Increasingly, more Americans are financially precarious. Lenders who adapt now will emerge stronger on the other side.
