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After years of running up balances that topped $1 trillion, Americans are finally easing off the credit-card accelerator. Growth in credit-card spending has now trailed debit for the better part of a year, ending a 14-quarter streak where plastic consistently outpaced cash-equivalent payments. The reversal signals a return to pre-pandemic norms, when debit typically made up just over half of all card transactions.

The cooling trend reflects households under strain from higher borrowing costs and the return of student-loan bills. Lenders are also getting choosier, steering new cards toward wealthier applicants, while many consumers turn to personal loans as a way to manage costly debt. With rates on credit cards averaging around 22%, the shift suggests borrowers are becoming more deliberate about how, and when, they lean on credit.