Why Nearly Half of Higher-Income Households Say They Are ‘More Reliant on Credit Cards Than Ever’ – Foundation for Economic Education

A recent report from Moneywise cited a survey from the personal finance software company Quicken that found 32% of Americans earning at least $150,000 a year are currently living paycheck to paycheck.

This seems extraordinary, but recent data published by the Federal Reserve Bank of New York show a surge in borrowing, with credit card debt in the second quarter of 2023 eclipsing $1 trillion for the first time. Despite high interest rates, people of all income levels are turning to credit cards to make ends meet. The New York Times recently noted that more than two-thirds of U.S. families now have credit cards, and balances were up more than 16% compared to the previous year.

Somewhat surprisingly, it is higher-income households that report being more reliant on credit cards than ever.

The Quicken survey found that 46% of higher-income groups are more dependent on their credit cards than they ve ever been, Moneywise reported, compared to just 40% of middle- and 39% of lower-income groups.

via fee.org

This will not end well. It’s a perfect example of something that can’t go on forever, and so won’t.