Credit becomes emergency lifeline as fraud fears climb

By mid-2026, North American consumers increasingly view credit lines less as a means to boost spending and more as a crucial liquidity buffer amid economic uncertainty. The share of consumers applying for credit reached 46.1% in June 2026—the highest since late 2021—yet spending decisions have become more measured, reflecting a cautious approach. Interestingly, while credit applications surged, expectations for future credit use declined, suggesting that consumers are securing borrowing capacity proactively rather than immediately increasing debt, a trend highlighted in PYMNTS Intelligence data showing 66% of millennials using credit cards primarily to manage cash flow rather than to spend more.

In Canada, despite modest financial improvements and rising incomes, half of consumers report their earnings are not keeping pace with inflation, fueling cautious financial behavior focused on essential spending and deliberate borrowing. TransUnion Canada's study reveals that one-quarter of Canadians plan to apply for or refinance credit over the next year, a figure unchanged from the previous year, underscoring continued reliance on credit as a financial tool amid cost-of-living pressures. Younger generations, especially Gen Z and Millennials, lead this demand, with 48% and 37% respectively intending to seek new credit, reflecting generational differences in navigating economic headwinds.

Across North America, credit access continues to expand broadly, with lenders adopting risk management strategies such as issuing smaller credit lines to align with consumers’ repayment capacity. Michele Raneri, VP and head of U.S. research at TransUnion, notes that consumers are managing credit obligations with relative discipline, as evidenced by modest growth in non-mortgage minimum payments that remain below inflation rates. This balanced dynamic allows consumers to maintain credit usage as a financial buffer without escalating debt burdens, supported by steady delinquency rates around 1.98% in Q2 2026, even as over half of Canadians cut back on discretionary spending to cope with inflation.

By mid-2026, Canadians faced a notable surge in fraud attempts, with TransUnion Canada reporting that 44% of consumers had been targeted in the past three months, up from 40% the previous year. This rise in threats has driven a behavioral shift, as 40% of Canadians now check their credit reports at least monthly—an increase from 37%—primarily to detect fraud and verify report accuracy rather than to improve credit scores. The prevalent fraud schemes have evolved beyond stolen credentials to more sophisticated social engineering tactics such as phishing (45%), smishing (42%), and vishing (42%), reflecting a strategic targeting of consumer behavior.

Despite heightened awareness and increased vigilance, a significant knowledge gap persists in how Canadians respond to fraud. Approximately one-third of those surveyed took no action against fraud attempts, and among them, over half (51%) admitted uncertainty about the appropriate steps to take. This disconnect underscores a critical vulnerability in consumer preparedness, even as protective technologies like multi-factor authentication and password-less logins gain traction—adopted by 24% of respondents in the last 60 days, marking a modest but meaningful 4% year-over-year increase.

House Bill No. 9149, formally titled the 'Open Finance and Consumer Data Empowerment Act of 2025,' represents a landmark legislative effort in the Philippines to broaden financial inclusion by leveraging alternative consumer data for credit assessment. By allowing consumers to voluntarily share up to 24 months of digital transaction histories—including e-wallet usage, utility payments, and phone-based transactions—the bill targets Filipinos with limited or no traditional credit history, thereby democratizing access to credit. FintechAlliance.Ph board trustee Todd Schweitzer underscores the dual impact of this legislation: expanding consumer financial access while simultaneously unlocking new market opportunities for the burgeoning fintech sector.

A pivotal governance innovation within House Bill 9149 is the creation of a Consumer Data Commission (CDC) under the Office of the President, tasked with overseeing data standards, accreditation, compliance, and enforcement across sectors. This commission is uniquely structured with leadership from a Securities and Exchange Commission commissioner as chair and a Bangko Sentral ng Pilipinas deputy governor as co-chair, incorporating regulatory agencies and private-sector stakeholders to ensure robust oversight. This institutional framework aims to build trust and transparency in the management of consumer data, a critical foundation for the bill’s success in fostering competition and protecting consumer rights amid the rapid rise of digital payments, which now constitute 57.4% of retail transactions in the country.

By August 2026, the Philippines mandated big banks and digital lenders to integrate the national ID system, a government-led modernization effort aimed at streamlining customer verification and bolstering security in financial transactions. This foundational step not only enhances efficiency but also sets the stage for more sophisticated fraud prevention mechanisms across the sector.

Industry leaders like Mastercard and IDfy emphasize that merchant trust in the digital economy transcends one-time verification, advocating for automated, risk-based onboarding paired with continuous real-time fraud monitoring. This approach, rated 4.4 out of 5 in importance by executives, leverages alternative data such as digital payment histories and utility records to unlock formal financing for over one million underserved MSMEs, thereby fostering inclusive growth.

To combat sophisticated fraud threats including document forgery and deepfakes, experts call for unified identity verification systems that integrate government IDs, alternative data, and behavioral analytics for ongoing fraud detection beyond initial onboarding. As Mastercard’s country manager Jason Crasto notes, strengthening collaboration among banks, payment providers, fintechs, and technology stakeholders is critical to sustaining merchant trust and enabling scalable, secure MSME onboarding in the evolving digital economy.

By 2026, the Philippines’ Credit Perception Index (CPI) soared to a record-high 75, reflecting a notable surge in consumer trust and positive attitudes toward credit, especially digital banks. This growth was fueled by increased favorability, product trust, and knowledge, signaling a maturing credit market that opens new avenues for responsible credit expansion, as emphasized by Peter Faulhaber, President and CEO of TransUnion Philippines.

Digital banks are rapidly capturing Filipino borrowers’ confidence, with the intent to borrow from these institutions doubling from 11% to 22% in 2026, the largest increase among all financing sources surveyed. This shift coincides with a decline in borrowing from informal sources like family and friends, which dropped to 45%, the lowest since the study’s inception, underscoring a significant transformation in credit market behavior.

Consumer familiarity and favorability toward digital banks have surged sharply, with 80% awareness and 79% favorability—both surpassing traditional banks’ scores. Moreover, digital banks have narrowed the perceived safety gap, achieving an 84% safety perception compared to 88% for traditional banks, highlighting their growing credibility and acceptance among Filipino consumers.

By mid-2026, Filipinos demonstrated a notably more mature perception of credit, increasingly viewing it as a strategic financial tool reserved primarily for emergencies rather than discretionary spending. Peter Faulhaber, president and CEO of TransUnion Philippines, highlighted this shift, noting that 59 percent of respondents cited emergency expenses as their top reason for credit use. This evolving mindset is further supported by a rising credit perception index, which reached 75 out of 100 by May 2024, fueled by increased trust in credit products and greater consumer knowledge, indicating more prudent borrowing behavior despite ongoing economic challenges.

Alongside this strategic use of credit, Filipino consumers have proactively enhanced their financial management by boosting emergency savings and seeking greater financial literacy. As of August 2026, 86 percent of respondents intended to save more for emergencies—up from 84 percent the previous year—while 73 percent actively pursued educational resources to improve their understanding and use of credit, marking a five-point increase. This dual approach of saving and education underscores a broader trend toward responsible credit use and financial resilience amid a difficult economic environment.