About one in five Americans are reluctant to review their credit card statements even as spending has rebounded since the start of the COVID-19 pandemic. This development arrives in conjunction with a tighter monetary environment as the Federal Reserve continues to hike interest rates to fight inflation.
In a report released by the travel website Upgraded Points, the company identified a set of behavioral inconsistencies in spending and saving habits after surveying about 3,500 Americans.
Most prominently, it found that about 20% of Americans were afraid to view their credit card statements for fear of seeing their high balances. This is despite the fact that the Upgraded Points study found participants turned to credit card spending to finance pricey purchases like vacations, automobile expenses, and electronics.
At the same time, it found that more than one-third of respondents possessed an inclination for instant gratification, relying on credit to purchase something they could not afford but did not wish to wait on.
But the findings by Upgraded Points carries a caveat. The survey was conducted in April 2022, and recent months have seen inflation and interest rates climb higher.
The most recent reading of the Consumer Price Index (CPI) found that inflation struck 9.1% in June, a higher reading than anticipated. At the same time, a survey by the Federal Reserve Bank of New York in May found that credit card balances stood at about $841 billion in the first quarter of 2022, up $71 billion in the last year.
With inflation continuing to climb, the Federal Reserve is expected to raise interest rates at their next meeting this week. Since March, the Fed has initiated several rounds of hikes, with the latest hike coming in June when rates were raised by 0.75%, the biggest increase since 1994.