NEW YORK—U.S. consumers have started to shift their spending to lower-cost products as they grapple with inflation at its highest level in 40 years, credit card issuers are reporting.
According to Bloomberg, overall volume on credit cards soared 20% to $1.1 trillion at the country’s largest lenders in the second quarter, with many of them reporting record spending for the period. Card company executives told Bloomberg the recent surge in prices has done little to damp consumers’ appetite for either travel or goods and services.
“They’re continuing to spend very rationally, they’re continuing to pay us back,” Synchrony Financial Chief Financial Officer Brian Wenzel told Bloomberg, adding that rising prices seem to be leaving customers deciding, “I may not be getting Ben & Jerry’s ice cream, I may get Breyers ice cream.”
Before second-quarter earnings were announced, investors worried how U.S. consumers were handling myriad headwinds, from soaring inflation and rapidly rising interest rates to the persistent coronavirus pandemic. Bloomberg added. But, one by one, credit-card executives said consumers seem to be holding up well so far, the report added.
“While there may be clouds, they’re far enough out there,” Roger Hochschild, chief executive officer of Discover Financial Services, told Bloomberg. “Consumers in our segment remain in good shape.”
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