Why Retail Credit Growth Is Slowing – And What It Means for Borrowers

The news of falling retail credit growth, with personal loans and credit card usage dropping, might leave many borrowers wondering what’s really happening behind the numbers. For years, personal loans and credit cards have fueled consumer spending, but now the brakes seem to be pressing down. One major reason is rising borrowing costs. With higher interest rates, loans have become more expensive, and people are thinking twice before swiping their credit cards or taking fresh personal loans. This cautious approach is a natural response when monthly budgets are already stretched by inflation. Banks are also playing their part. Many lenders are tightening their lending norms to avoid overexposure to unsecured loans, especially after years of aggressive retail credit expansion. For some borrowers, this means approvals are harder to come by, or credit limits are not increasing as fast as before. For individuals, the slowdown carries a mixed message. On the one hand, it signals a healthier financial discipline among households. On the other, it highlights the importance of borrowing smartly, managing credit wisely, and preparing for a more conservative lending environment. If approached strategically, this shift could actually help consumers avoid debt traps and maintain better financial stability in the long run.