Inflation begins to strain finances of young, low-income Americans

Generation Z consumers and those with low credit scores are falling behind on credit card 

As high inflation forces Americans to spend more on gas and bills, young and low-income consumers are starting to feel financial pressure, Qazet.az reports.

Generation Z consumers and those with low credit scores are falling behind on credit card and auto loan bills and accumulating credit card debt at a pace not seen since before the pandemic.

For instance, credit card balances for people ages 25 and younger rose by 30% in the second quarter from a year earlier, compared with an increase of just 11% among the broader population, according to a random sampling of 12.5 million U.S. credit files compiled by credit score company VantageScore. Balances for non-prime borrowers, or people with credit scores below 660, rose by nearly 25% over the same period.

For months, things have been looking good for U.S. consumers, their bank accounts padded by government stimulus, student loan forbearance and pandemic-era savings. Bank executives have consistently said consumers have healthy financial cushions and are spending money despite high inflation and the slowing economy.