Money

What the “recession” is doing to our credit card habits

Published

2 years ago

August 24, 2023

ticker NEWS

Despite a series of interest rate hikes aimed at curbing inflation, consumers have displayed remarkable resilience.

However, recent indications suggest a shift in their spending habits.

Jack Kleinhenz, the Chief Economist of the National Retail Federation (NRF), points out that consumers are still purchasing more than they were last year. Nevertheless, there is a noticeable slowdown in spending growth as the economy stabilizes.

Kleinhenz elaborated on this observation in the August edition of NRF’s Monthly Economic Review, stating, “There are ongoing economic challenges and questions, and the pace of consumer spending growth is becoming incrementally slower.”

Over the past year, credit card debt reached a record high, while the personal savings rate declined. According to a report from the Federal Reserve Bank of New York, credit card balances for Americans soared to an all-time high of $1 trillion this year.

However, revolving debt, primarily composed of credit card balances, contracted in June, as reported by the Fed’s G.19 consumer credit report earlier this month.

Bank of America’s recent consumer checkpoint noted that after a robust start to the year, credit and debit card spending began to slow in the spring.

Slight increase

In July, total card spending registered only a 0.1% year-over-year increase after three consecutive months of year-over-year declines. This slight improvement was partly attributed to Fourth of July sales, Amazon Prime Day, and “Barbenheimer.”

As interest rates continue to climb, households are feeling the financial strain, leading consumers to reduce their reliance on credit cards for purchases, according to Kleinhenz. Currently, the average credit card interest rate stands at over 20%, reaching an all-time high.

NRF’s President and CEO, Matt Shay, mentioned on “Squawk Box” that spending habits are evolving. Consumers are now seeking value and focusing more on essentials, rather than discretionary purchases. He remarked, “Things have changed.”

While consumers are still in a favorable financial position and continue to spend, Shay noted that their spending patterns have shifted away from those observed 18, 12, or 24 months ago.

“A consumer spending slowdown is inevitable,” asserted Matt Schulz, Chief Credit Analyst at LendingTree. He emphasized that consumers face several significant challenges, including the impending resumption of student loan payments this fall, which will serve as a substantial test.

Schulz pointed out the uncertainty surrounding the future of card spending. It could either surge if people rely on credit cards to make ends meet or contract further if borrowers cut back on discretionary expenses such as travel and dining out.

As economists suggest a ‘soft landing’ for the economy, consumers are advised to remain vigilant and adapt to changing financial circumstances.

Money

U.S. jobs report, Fed decisions, and Japan’s economic risks explained

January US jobs report sparks uncertainty; analysts debate impact on Federal Reserve policy and market confidence.

Published

22 hours ago

February 12, 2026

Harvey Vargas

January US jobs report sparks uncertainty; analysts debate impact on Federal Reserve policy and market confidence.

The January US jobs report shows a mixed picture for the economy, with payroll revisions and steady unemployment leaving analysts questioning the impact on Federal Reserve policy. We break down what the numbers mean for interest rates and market confidence.

US stock markets could face turbulence as investors digest the latest jobs data. David Scutt from StoneX explains how these figures may influence equities and what the outlook is for global markets.

Meanwhile, developments in Japan and a strengthening yen could spark new macroeconomic risks. From carry trades to unexpected shocks, we explore how these factors ripple across the global economy.

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#USJobsReport #FederalReserve #StockMarket #MacroRisks #JapanEconomy #GlobalMarkets #CurrencyTrading #EconomicUpdate

Money

Alphabet launches $20B bond to fund AI expansion

Alphabet’s $20B bond offering highlights investor confidence in AI growth, enabling funding without shareholder dilution.

Published

2 days ago

February 11, 2026

Harvey Vargas

Alphabet’s $20B bond offering highlights investor confidence in AI growth, enabling funding without shareholder dilution.

Alphabet has launched a record $20 billion bond offering to finance its massive AI infrastructure build-out, signalling strong investor confidence in the company’s growth strategy. The oversubscribed sale shows that investors are betting on Alphabet’s AI potential and long-term returns.

By using debt instead of equity, Alphabet can raise funds without diluting shareholders. The money will support AI research, advanced computing, and other strategic projects, cementing the company’s leadership in the sector.

Brad Gastwirth from Circular Technologies explains how corporate debt is reshaping tech financing and how investors perceive AI-linked bonds. This record issuance could set a trend for other tech companies looking to fund innovation.

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Money

AI tax tool sparks market turmoil for financial firms

Major financial firms’ stocks fell sharply after an AI tax tool launch, raising investor fears of disruption in advisory services.

Published

2 days ago

February 11, 2026

Harvey Vargas

Major financial firms’ stocks fell sharply after an AI tax tool launch, raising investor fears of disruption in advisory services.

Shares of major financial services firms tumbled after the launch of a new AI-powered tax planning tool. LPL Financial dropped nearly 11%, while Charles Schwab and Raymond James Financial fell more than 9%, signalling investor concern over AI disrupting traditional advisory services.

Morgan Stanley also saw a 4% decline as fears grow that AI could replace some of the most profitable offerings of established firms. Earlier this year, the introduction of other AI models already caused turbulence in software stocks, suggesting this could be a broader trend affecting multiple sectors.

The iShares U.S. Broker-Dealers and Securities ETF was down 4% on Tuesday, reflecting the market-wide uncertainty surrounding AI adoption in finance. Investors are closely watching whether AI will complement or cannibalise the industry’s core services.

#AIImpact #WallStreet #FinancialMarkets #InvestingNews #MorganStanley #CharlesSchwab #RaymondJames #FinTech