Opinion: Rising Stress Among Higher-Income Borrowers Should Alarm Card Issuers

Just when you thought you could count on wealthier consumers to be a stable source of borrowers, here comes a bit of bad news. A 2026 Financial Stress Forecast report from the National Foundation for Credit Counseling (NFCC) found that an increasing number of higher-income Americans are finding themselves in difficult financial positions. 

Not only are many falling behind on payments, their obligations are consuming an alarming portion of their available cash. Rising costs are a major factor, but so is an overreliance on credit instead of scaling back spending.

By not picking up on the stress signs among consumers who seem financially healthy, credit card issuers may be underestimating their underwriting risk by extending more loans and lines of credit. If borrowers get more credit than they can realistically handle, their financial problems may not emerge slowly, but all at once.  

The NFCC represents hundreds of accredited credit counseling agencies throughout the United States, and I must admit that its recent report makes me nervous. 

As a former credit counselor, I’ve worked with countless individuals who were barely making ends meet, so they borrowed money to stay afloat. Many wanted to use the agency’s debt management plan to gain relief and get ahead.

Their consistent payments helped improve their credit scores, and they gradually deleted their balances. At the same time, they saved money and worked their way up to a better future. 

Before the COVID-19 pandemic, the typical debt management plan participant had an average income of $40,000 and held roughly $10,000 worth of unsecured debt. With careful budgeting and dedication to the process, they came out ahead. 

Now, however, the average credit counseling client earns $70,000 and their debt loads are nearing $35,000. It’s an enormous spike in earnings, but it’s the income-to-debt ratios that are so concerning. Consumers went from owing a quarter of their income to half of the money they made. That makes success less likely, since there is so little wriggle room. 

Although factors like seasonal spending decisions pushed consumer debt upward in 2025, PYMNTS research found that, for those not living paycheck to paycheck, rising living costs were also to blame. That’s why instead of pulling back, many middle- and higher-income households turned to credit to manage bills.

Not only did the VantageScore report find higher delinquency rates in all credit categories, the NFCC report found that debt management plan clients have been faltering on their payments too.

And they’re falling behind despite these plans being offered only to people who have enough money to pay their debt after meeting their essentials (plus a little left over for savings). 

Since debt management plans are often seen as the last resort before bankruptcy, the legal way out may be next. In 2025, personal filings spiked by 10.6%, a trend neither borrower nor lender wants to continue. 

Payment history is the most impactful credit factor, and delinquencies as well as excessive debt loads are reflected in declining credit scores. From December 2023 to December 2025, the number of prime borrowers declined by 1.1%, a result of ongoing affordability constraints, according to a 2026 VantageScore report. 

Mike Croxson, CEO of the NFCC warned of a “disturbing shift from discretionary debt to survival debt.” The difference, of course, is that consumers can take control over the first by reducing spending on nonessentials, but there’s only so far people can lower such critical expenditures as food costs and utilities. 

In fact, total household debt has escalated to $18.8 trillion in Q4 2025, reported the Fed. Vast numbers of Americans have inadequate safety nets, with only 48% of surveyed consumers saying they are confident they could cover a $2,000 emergency within 30 days, according to 2025 PYMNTS research. 

Without a financial buffer, Croxson notes that the climb in stress isn’t gradual, it’s vertical. 

And the red flags before that happens aren’t always evident. Before missing credit card and loan payments, most people will sacrifice bills that do not appear on credit reports.

They may be behind on their electricity bill or are late on their rent. They could be using buy now, pay later plans or borrowing money from friends and family members, resulting in hidden debt. 

So what’s the solution? Adjusting your underwriting models, conducting more research and verification, offering smaller credit lines with gradual increases. You can’t reduce inflation, but you can lower your risk as you avoid putting borrowers in a worse position than they’re in now. 

Credit counseling is great. Encourage it. Structured payment plans aren’t right for everyone but when people are struggling to manage their bills, professional budget guidance is always a good idea.