Inflation Drives Record Back-to-School Spending and Credit Card Debt

More than half of parents say inflation is impacting their ability to pay for back-to-school expenses. Many plan to take on new credit card debt.
Homeschooling parents are especially affected - 75% say inflation is impacting their ability to fund education costs.
Back-to-school spending is expected to reach a record $41.5 billion this year, driven by high demand for electronics.
38% of parents plan to use credit cards to pay for back-to-school supplies and clothing.
If struggling with debt, paying it down with a personal loan at a lower rate could lower monthly payments.

foxbusiness.com

Relevant topic timeline:

8/29/2023

Consumers amp up back-to-school spending because of inflation: Strategist

According to a survey by Jefferies, 50% of consumers in the US plan to spend more on back-to-school shopping this year, with 70% citing inflation as the primary reason for increased spending, particularly on apparel; Walmart's private label business is expected to benefit from this trend.

8/31/2023

US consumer spending accelerates; declining savings a red flag

U.S. consumer spending increased in July, boosting the economy and reducing recession risks, but the pace is likely unsustainable as households dip into their savings and face potential challenges from student debt repayments and higher borrowing costs.

9/4/2023

Credit card and car loan defaults hit 10-year high as inflation...

Americans are struggling to pay their bills as inflation rises, leading to a surge in credit card and auto loan defaults, which is expected to worsen with rising interest rates and the expiration of the student loan moratorium. Low- and middle-income earners are particularly affected, resorting to using credit cards for essential purchases, while opening new lines of credit to pay off debts, resulting in record-high credit card debt. The resumption of student loan payments and potential holiday season spending add to concerns about escalating debt levels.

9/12/2023

Credit Card Debt Jumps to $43B in Q2 as Higher Rates Make Balances Harder to Pay Off

U.S. consumers have accumulated $43 billion in additional credit card debt during Q2 2022, three times the average amount since the Great Recession, and credit card interest rates have soared to over 20%, raising concerns about the impact of inflation and rising interest rates on consumers' ability to pay off their balances. However, some economists argue that higher wages are helping consumers keep pace with their debt, and the overall rate of charge-offs remains low. Nonetheless, the combination of spent-down pandemic savings and the resumption of federal student loan payments could pose challenges for lower-income borrowers and hinder consumer spending.

10/18/2023

Household Spending Seen Staying Strong Despite End of Loan Payment Pause

Household budgets in the U.S. are expected to continue supporting high levels of spending, with homeowners benefiting from mortgage refinancing during the pandemic and people with student loans planning to reduce spending by only $56 per month on average after payments resume. However, delinquency rates on credit cards and auto loans have increased, and some borrowers anticipate missing loan payments.

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Posted 9/22/2023, 3:13:46 PM