In 2020 and 2021, large decreases in consumer spending combined with stimulus checks and other financial relief helped reduce revolving credit card balances, which is the amount that accrues interest carried from one billing cycle to the next. And in the spring of 2022, total revolving credit card debt reached its lowest level since 2014. But as consumer spending started to recover and inflation swelled, revolving debt has been climbing steadily and is now nearing pre-pandemic levels.
Unfortunately, at the same time credit card balances rose, the cost of carrying credit card debt increased sharply. In a bid to rein in inflation, the Federal Reserve raised interest rates 10 times since March of 2022. Consequently, the average credit card interest rate for accounts assessed interest swelled from 16.17% in early 2022 to nearly 21% in Q1 2023.
The combination of high interest rates and rising costs has put American households in a challenging position. Now, nearly 70% of people report they are finding it difficult to pay for basic living expenses—up from less than 50% in May 2021, according to the U.S. Census Bureau’s Household Pulse Survey. At the same time, more and more Americans have turned to their credit cards. As of February 2023, 37% of adults said they used credit cards to cover basic living expenses, up from 23% in March 2021.
Aside from regular income sources, credit cards or loans are the most common payment method used to cover basic living expenses. The 37% of adults who reported using credit cards or loans to pay for living expenses is nearly 10 percentage points higher than the 28% of adults who used savings, sold assets/possessions, or made retirement account withdrawals. Less common methods for paying for living expenses include borrowing from friends or family, various government assistance programs, and money saved from deferred or forgiven payments.
To determine the states where people are using credit cards to cover basic living expenses, researchers at Upgraded Points analyzed the latest data from the U.S. Census Bureau. The researchers ranked states according to the share of adults who self-reported recently using credit cards to meet their spending needs. Adults were surveyed during the month of February 2023. Researchers also calculated the total adults using credit cards to cover expenses, the share of adults with difficulty covering expenses, and the total adults with difficulty covering expenses.
Here is a summary of the data for Georgia:
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Share of adults using credit cards to cover expenses: 33.3%
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Total adults using credit cards to cover expenses: 2,388,785
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Share of adults with difficulty covering expenses: 74.4%
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Total adults with difficulty covering expenses: 5,444,338
For reference, here are the statistics for the entire United States:
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Share of adults using credit cards to cover expenses: 37.4%
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Total adults using credit cards to cover expenses: 84,142,385
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Share of adults with difficulty covering expenses: 69.7%
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Total adults with difficulty covering expenses: 160,668,322
For more information, a detailed methodology, and complete results, you can find the original report on Upgraded Points’s website: https://upgradedpoints.com/credit-cards/credit-card-use-living-expenses-by-
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