Inflation Anxiety Is Reshaping How Americans Think About Borrowing
For millions of Americans, the question of whether to take out a new loan or refinance an existing one has become far more complicated in 2025. A new survey from TransUnion — one of the nation's leading credit bureaus — reveals that inflation anxiety is playing a significant and measurable role in suppressing consumer appetite for credit. With gas prices spiking, household budgets strained, and economic uncertainty showing little sign of easing, many consumers are simply opting to stay on the financial sidelines rather than take on new debt obligations.
The findings arrive at a critical moment for the U.S. economy, offering lenders, mortgage professionals, and financial planners an important window into the evolving psychology of American borrowers — and what it could mean for credit markets in the months ahead.
What the TransUnion Survey Found
TransUnion's second-quarter consumer pulse survey, which polled nearly 3,000 U.S. residents aged 18 and older between April 23 and May 11, 2025, painted a picture of an economy that is resilient on the surface but showing real cracks underneath. About half of respondents reported optimism about their household finances — a figure that held steady compared to a year ago. At first glance, that sounds encouraging. But dig deeper into the data and a more complicated story emerges.
Inflation ranked as the top financial concern across every single demographic group surveyed. Fifty percent of respondents identified it as their primary worry, up from 47% just a year prior. That three-point increase may sound modest, but it represents a meaningful shift given the already-elevated baseline of concern that existed heading into the survey period.
Even more striking were the numbers around gasoline prices. The Iran war, which began in late February, sent fuel costs sharply higher, and consumers noticed. A full 71% of respondents said they were "very concerned" about rising fuel costs — compared to just 43% a year ago. That near-30-point jump in fuel-price anxiety represents one of the starkest single-year sentiment shifts the survey captured.
The Direct Link Between Inflation Worry and Credit Reluctance
Perhaps the most consequential finding for the lending industry is the strong correlation between inflation anxiety and reduced intent to seek new credit. Among consumers who cited inflation as their primary concern, only 25% said they planned to apply for new credit or refinance existing credit within the next 12 months. Compare that to 47% of the broader survey sample who expressed similar plans, and the divergence is stark.
In practical terms, this means that the consumers most likely to be feeling financial pressure — and potentially most in need of credit products — are also the least likely to pursue them. That creates a challenging dynamic for lenders who may be looking to expand their books or for mortgage originators hoping for a refinance wave to materialize as rates shift.
The implications extend beyond individual borrowing decisions. When a large portion of the consumer base pulls back from credit simultaneously, it can have measurable effects on economic activity, loan origination volumes, and the overall velocity of money flowing through financial systems.
Higher-Income Earners Are Losing Momentum Too
One of the more nuanced findings in the TransUnion report concerns higher-income consumers — a group that has served as a primary engine of U.S. economic output in recent years. The so-called "K-shaped economy," in which wealthier households continued to thrive while lower-income groups struggled, has been a defining feature of the post-pandemic financial landscape. But that divergence may be narrowing, and not in an encouraging way.
TransUnion's data flagged declining momentum among higher-income earners, suggesting that the economic pressures affecting lower-income groups are beginning to creep upward through the income ladder. When the segment of consumers that has been most insulated from inflation-driven hardship starts pulling back, it signals a broader and potentially more durable shift in consumer sentiment.
Inflation Surges for a Third Consecutive Month
The TransUnion survey results arrived in the same week that a pair of government inflation reports confirmed that prices surged for a third straight month in May. Energy costs were identified as a primary driver of that acceleration, compounding the fuel-price anxiety already documented in the consumer survey. Supply chain disruptions, meanwhile, have added further upward pressure, making it harder for the Federal Reserve and policymakers to identify a clear path toward price stability.
For consumers trying to plan their financial futures — whether that means buying a home, refinancing a mortgage, opening a new credit card, or taking out a personal loan — sustained inflation makes every calculation harder. When you cannot reliably predict what groceries, gas, or utilities will cost six months from now, committing to a new monthly payment feels like an elevated risk.
Resilience Remains, But Its Limits Are Being Tested
Charlie Wise, TransUnion's head of global research and consulting, struck a measured tone in the report. "Affordability has become the defining issue shaping consumer finances today, yet consumers remain remarkably resilient," he noted. That resilience has been a consistent theme in post-pandemic economic commentary — and it is real. Unemployment remains relatively low, and household balance sheets, while under pressure, have not collapsed.
But resilience is not the same as confidence, and the survey data makes clear that consumers are adapting their behavior to a more uncertain environment. Pulling back from credit is, in many ways, a rational response to affordability concerns. Consumers are not panicking — they are recalibrating.
What This Means for Lenders and Mortgage Professionals
Expect softer near-term credit demand: With nearly half of inflation-anxious consumers opting out of credit plans for the next year, lenders should prepare for continued headwinds in origination volumes across multiple product categories, including personal loans, auto financing, and mortgage refinancing.
Messaging around affordability will matter more than ever: Consumers who are worried about costs respond to transparent, value-driven communication. Financial products and marketing that emphasize stability, manageable payments, and long-term savings are likely to resonate more effectively in this environment.
Monitor the higher-income segment closely: The weakening momentum among higher-income earners is a relatively new development and one worth watching carefully. If this group continues to pull back, it could signal a more significant cooling of credit demand than current projections anticipate.
Energy price volatility is a key variable: The sharp spike in fuel-price concern — from 43% to 71% in a single year — underscores how quickly external shocks can reshape consumer sentiment. Geopolitical events affecting energy markets deserve close attention from anyone trying to forecast borrowing behavior.
The Bottom Line
The TransUnion survey adds important texture to what economic data alone cannot fully capture: how Americans are feeling about their financial lives, and how those feelings are shaping the choices they make. Right now, anxiety about inflation and rising costs is translating directly into reduced appetite for credit — and that has real consequences for lenders, borrowers, and the broader economy alike. As affordability remains the defining challenge of the moment, the institutions and professionals that find ways to meet consumers where they are will be best positioned to navigate what comes next.