The American Financial Services Association (AFSA) has released its quarterly Consumer Credit Conditions (C3) Index, showing mixed trends in the consumer credit market. The report found that higher-income households are reducing borrowing by choice, while lower-income households continue to rely on credit to meet essential expenses. Lenders also expressed cautious optimism about potential policy-driven relief.
According to AFSA, the Q1 2026 index surveys providers of mortgages, auto financing, personal installment loans, and credit cards. It found that overall loan demand fell to its lowest net-increasing level since the survey began, while demand for subprime lending increased. The report also noted diverging borrowing behavior across income groups, with higher-income households scaling back large credit commitments and lower-income households continuing to use credit for everyday needs.
Lenders surveyed for the index expect loan demand to increase across most credit categories over the next six months. The report also indicated expectations for modest improvements in funding conditions if policy changes provide relief, according to Case for Credit.
The American Financial Services Association represents more than 410 member companies in the consumer credit sector, including providers of auto financing, personal loans, credit cards, and mortgages. Based in Washington, D.C., the association advocates for responsible lending, promotes financial literacy through its education foundation, engages with policymakers and regulators, and provides compliance and leadership training programs.
