Here’s what Americans say they’d do with a surprise pay bump
U.S. consumers may be growing a bit more uneasy about their debts.
That’s according to a report released Tuesday by the Federal Reserve Bank of New York, which looked at Americans’ recent spending habits and how much they plan to spend in the near future.
The survey asks individuals how they would allocate an unexpected 10% increase in their income.
An average 38% of households said they would use that surprise pay bump to pay down debt, rather than spending or saving the funds.
That’s a jump of nearly a 5 percentage points from last year and the highest share of respondents who said they would set the money aside for debt payments since 2016.
Only 16% said they would spend or donate that money – the lowest percentage since the Fed started tracking the data nine years ago.
U.S. consumers have been racking up big debt balances over the past year, with consumer credit-card debt levels hitting record highs in recent months. Widespread use of buy-now-pay-later services during the holidays added to worries that so-called phantom debt may be weighing on Americans’ wallets without being documented on their credit reports.
Total consumer credit, a measure of how much money people have borrowed, topped $5 trillion for the first time in November, a trend that Sheila Bair, former head of the Federal Deposit Insurance Corp., called “not good.”
What else the data showed