Gen Z and Millennials Lead in Using Loans and Credit Cards Amid Rising Prices

  • Gen Z and millennials most likely to use loans and credit cards due to inflation
  • Consumers cut costs by reducing restaurant spending, canceling subscriptions, and buying less fresh produce and meat
  • Switching to generic products is another cost-cutting measure
  • Contributions to savings have decreased as consumers work more and delay significant purchases
  • Credit card debt balances rose to $1.14 trillion in Q2 2024
  • Inflation’s impact on low-income households and job loss victims will take time to wear off

A Federal Reserve report reveals that consumers are turning to credit cards and loans to manage inflation, with Gen Z and millennials being the most likely age groups to do so. In response to higher prices, people have reduced spending on restaurant food, subscriptions, fresh produce, and meat, switched to generic products, and contributed less to savings while working more and delaying significant purchases. Credit card debt balances rose to $1.14 trillion in Q2 2024. The impact of inflation on low-income households and those experiencing job loss will take time to wear off.

Factuality Level: 7
Factuality Justification: The article provides accurate and relevant information about inflation, consumer behavior, and credit card debt trends based on research from the Boston Fed and Federal Reserve Bank of New York’s Center for Microeconomic Data. However, it lacks a clear focus and contains some redundancy in mentioning the same figures multiple times.
Noise Level: 5
Noise Justification: The article contains some relevant information about inflation and its impact on consumer behavior but also includes promotional content for an industry event (Snowflake Industry Day) which may not be directly related to the main topic. It could have been more focused on the economic trends and their consequences without mentioning the event.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses inflation and its impact on consumer behavior, leading to increased credit card debt.
Financial Rating Justification: The article covers financial topics such as inflation, consumer spending, and credit card debt which can have an effect on the economy and financial markets.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text.

Image source: S44315641 / Own work

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