Consumer Lending, Credit Cards and Mortgages

American households owed about $18.8 trillion in mid-2026: roughly $13.1 trillion of mortgages, $1.7 trillion of auto loans, $1.65 trillion of student loans, $1.26 trillion of credit card balances and $0.46 trillion of home-equity lines (New York Fed Household Debt and Credit Report, Q2 2026). Every dollar of it is somebody's asset, and lending to consumers is one of the oldest and most profitable businesses in finance. It is also the one where the gap between an apparently brilliant year and a disastrous one is widest, because the true cost of a loan, the credit loss, shows up a year or three after the revenue has been booked. This section explains how each consumer credit product makes money (cards, personal instalment loans, buy now pay later, auto, mortgages, student loans and payday or small-dollar credit), how loans are funded (deposits, warehouse lines, securitisation, forward-flow sales, the government-sponsored mortgage machine), how servicing works, how regulators shape pricing, and what the landmark booms and busts teach. A worked example computes a credit card cohort, a personal-loan cohort and a BNPL order; a checklist sets out diligence questions for any consumer lender.