EVERYTHING IS GOING SWIMMINGLY: Nearly Half of Higher-Income Households Say They Are ‘More Reliant on Credit Cards Than Ever.’

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.”

Meanwhile, a third of earners making more than $150,000 a year say they won’t be able to pay off their balance this year, a costly move considering that LendingTree reports that the average interest rate on a credit card currently stands at 24.45%.

“Bidenomics is working,” according to the White House — and I believe them.