Thanks To Inflation, More Than Half of Americans Can’t Afford Monthly Expenses Without a Credit Card

56% of Americans cannot afford their monthly expenses without charging a credit card.

Updated on Mar 23, 2023

Table of Contents

Inflation is hurting people’s monthly budgets, and gas is the #1 culprit
Who does inflation hurt the most?
One in two cardholders has credit card debt—and they’re more likely to rely on plastic

A recent study by online financial marketplace LendingTree® has revealed that 56% of Americans would not be able to pay all their monthly expenses without charging a credit card.

With inflation sending the prices of groceries, clothing, and gas skyrocketing, Americans are more reliant on plastic than ever—and that’s a scary thing. Here to break down the numbers is

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Inflation is hurting people’s monthly budgets, and gas is the #1 culprit

Inflation is on the rise, and cardholders are feeling the pinch—big time. A majority (64%) of the cardholders surveyed by LendingTree said that inflation was among their top money worries, with just 7% asserting that they’re not worried about inflation.

More than eight in 10 of those surveyed—83%, to be exact—said that they’d seen inflation negatively impacting their monthly budget. In particular, cardholders reported noticing increased prices for the following items:

Gas: 46%

Groceries: 30%

Household bills: 10%

Who does inflation hurt the most?

The survey broke down respondents by generation, and discovered that boomers are feeling the pain of inflation more than any other generation.

Many baby boomers are on a fixed income, and 90% reported seeing a negative impact of inflation on their budgets. They also have the highest level of worry about inflation, with 67% of boomers saying it’s among their top money concerns.

For younger Americans, on the other hand, the worry may be lower—but credit card utilization is higher. When asked whether they could meet all their monthly expenses without credit cards, 68% of Gen Z respondents and 66% of millennials said no. While some people included non-essential expenses like entertainment in their monthly budget, 23% said they wouldn’t be able to afford basic necessities without turning to plastic.

One in two cardholders has credit card debt—and they’re more likely to rely on plastic

Overall, 28% of cardholders are more dependent on credit cards today than they were at this time a year ago—and more of them are in debt.

The survey found that 53% of cardholders currently have credit card debt, compared to 50% last year. What’s more, those who do carry debt are more likely to be dependent on credit cards for monthly expenses. Parents with young kids and Gen Xers are most likely to have a higher percentage of debt, which often represents a vicious cycle for cardholders—especially when inflation enters the picture.

One third of cardholders carrying debt wouldn’t be able to pay for essentials each month without credit cards. This means that they’re not in a position to pay off their debt, build up savings, or adapt to the economic blows of inflation.

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