2025 consumer credit forecast for El Pasoans

EL PASO, TX (KVIA) -- The Federal Reserve announced its third interest rate cut since September, lowering rates by a quarter point. However, analysts say this could be the last rate cut for a while as inflation remains above the two percent target. 

For El Paso families, the rate cut could bring some relief.

This news comes as experts say there are signs of financial stability for 2025. ABC-7 spoke to Michele Raneri, Vice President and Head of U.S. Research for TransUnion who says delinquencies on credit cards and loans are starting to stabilize. 

Raneri explained that during the pandemic many people used stimulus checks to pay off debt. However, as restrictions lifted, credit balances increased, leading to a rise in delinquencies. “People had that fear of missing out or the FOMO, and they started traveling more and purchasing more and going out to eat again,” she said. “As they did that and we started seeing inflation rise.”

Raneri says these trends are leveling off, signaling potential relief for consumers.  

“It’s not necessarily that delinquencies are going down,” Raneri explained. “But we're seeing this market start to take kind of a breath as we might be ending the end of this era of the pandemic and its effects on consumer credit.”

Raneri also encourages El Pasoans to take proactive steps to improve their credit, especially as we head into a new year. She says monitoring your credit report, making on-time minimum payments, and keeping credit card balances low are key strategies.  

Credit scores below 600 are considered low, which can make it harder to access credit or result in higher interest rates. Scores above 700, however, offer access to the best pricing for loans and credit cards.  

Raneri says many people are using their credit cards for everyday purchases, and that’s ok, as long as you have a budget and stick to a plan.

“Some people will use it and pay it off every month. Some people also use it and pay off their balance in a few months.” she shared. “The other group sometimes will just revolve on their credit card, and they might keep even kind of a constant amount on there, but they use it and pay it over a series of months or maybe even over years.”

Raneri suggests monitoring your credit report and score by going to transunion.com - an easy tool to help you better understand.