4 out of 5 consumers’ spending habits were impacted by inflation, leading many to seek relief through savings and rewards
TD Bank, America’s Most Convenient Bank announced the findings of its annual 2023 Consumer Spending Index, revealing that 4 out of 5 consumers have had their spending habits impacted by inflation, with over half of them turning to discounts and promotions (57%) and seeking lower-priced options (53%) to combat inflation.
The survey polled more than 1,000 Americans to gauge shifts in consumer spending behaviors and credit usage. As inflation continues to impact all Americans, respondents are prioritizing rewards and showing signs of high financial literacy – underscoring the importance of responsible financing during economic instability.
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“Consumers are undoubtedly continuing to feel the impact of inflation and rising interest rates,” said Chris Fred, Head of Credit Cards and Unsecured Lending at TD. “And it is not surprising that so many consumers are proactively doing their homework, speaking to financial professionals for pointed advice, and seeking strategic ways to offset these rising costs, like identifying more available discounts or cost-effective alternatives.”
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Consumer Spending Focused on Necessities
With rising costs of living, respondents’ spending focused on necessities. Groceries were the leading expense for 51% of respondents, with another 13% spending primarily on gas. Meanwhile, only 5% of consumers are spending the most on discretionary expenses like vacations, electronics, and high-end retail items. Thirty-nine percent of respondents have also cut their discretionary budget in response to rising costs of living, and 27% have had to dip into their savings to keep up.
“As costs rise, people need a little more flexibility,” said Fred. “We heard from consumers that they are looking for more breathing room.”
In response to this need for flexibility, TD Bank introduced TD FlexPay, which provides cardholders with increased flexibility by giving them the option to schedule a Skip a Payment once a year. Cardholders can schedule a Skip a Payment for a future payment due, subject to eligibility requirements, such as the cardholder may not be delinquent or in default at the time they scheduled the Skip a Payment and the month for which the payment would be skipped. Cardholders can take advantage of the Skip a Payment option starting six months after account opening and will accrue interest during the month for which they skip a payment. In addition, they will automatically have their first late fee refunded every twelve billing cycles.
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