As the cascade of reports about still-rising inflation rates continues, other data reveals the impact of higher prices on consumer sentiments and behaviors. According to a new survey commissioned by Lending Tree, 83% of credit cardholders said that inflation is having a negative impact on their monthly budgets and expenses.
A good chunk of those budgets go to groceries. The survey showed that following gas for their vehicles, groceries are the second most-affected area of expenses these days.
As a result of the pinch of inflation on their budgets for food and other necessities, more consumers are relying on credit this year compared to last year. More than half – 56% – of cardholders say that their dependence on cards has increased over the past year.
The Lending Tree survey also affirmed that concern about inflation spans demographics. Baby Boomers are the most worried about inflation, while younger consumers, including 68% of Gen Z buyers, 66% of Millennials and 64% of parents with kids under 18, are relying on credit cards more than others.
“Many Americans already had a razor-thin financial margin for error,” said Matt Schulz, chief credit analyst at Charlotte, N.C.-based LendingTree. “But now, thanks to skyrocketing inflation, any wiggle room that those families had in their budget might just be gone.”
Other recent research uncovered inflation-era wariness and a willingness among consumers to change habits. Earlier this month, the Federal Reserve released a report showing that consumer credit rose by $41.8 billion in February, a major hike over the $8.9 billion increase in January. Another survey from Bankrate.com found that 69% of adults expect to change their travel plans for this summer’s vacations, mostly traveling shorter distances and planning fewer trips.