On November 6th, Financial Union News (Editor Huang Junzhi) With the progress of the US presidential election, not only the two presidential candidates are exhausted, but Americans are also very worried. So how do they alleviate this worry? Surveys show that "retail therapy" seems to be useful, but their wallets cannot keep up.

According to a new report from Intuit Credit Karma, about 27% of surveyed consumers stated that they are engaging in "doomsday consumerism" - that is, despite concerns about economic and diplomatic affairs, they continue to spend money. This habit is more common among the younger generation, with 37% of Gen Z and 39% of Millennials indicating they would do so.

Among the surveyed Americans, over half (60%) are worried about the world and economic situation, a higher proportion than a year ago.

The institution surveyed 1001 American adults in late October. The report found that the most concerning issues for the "doomsday preppers" include cost of living (55%), inflation (43%), and the presidential election (28%).

According to a survey by Intuit Credit Karma, over one-third (36%) of respondents said that due to global and economic uncertainty, they cannot find reasons to save money. This percentage rises to 47% and 43% respectively among Gen Z and Millennials.

Pursuing a sense of "control".

Consumer financial advocate Courtney Alev from the institution stated that consumers may be seeking "a sense of control, especially in times when many things feel out of control." The impact of "doomsday consumerism" is greatest on young people because they happen to spend a lot of time "surfing the internet" or on the internet and social media.

Bankrate.com's survey last year showed that impulse shoppers on social media spend an average of $754 per year.

Bankrate's senior industry analyst Ted Rossman said, to some extent, this impulse is "generated during the pandemic". He said this trend is particularly common among young shoppers, who may feel the "situation is not in their favor".

Financial distress

"Doomsday spending" may lead to even greater financial distress. According to data from the Federal Reserve Bank of New York, credit card balances in the United States reached $1.14 trillion in the second quarter of 2024.

A recent Bankrate survey found that as of June this year, 50% of cardholders carry a monthly balance on their credit cards. Rossman said, "The proportion of full payments right now is actually the lowest in four years."

Cardholders are also carrying debt for longer periods. Bankrate found that out of every 10 people with credit card debt, about 6 have been using credit cards for at least a year.

"This is a cycle that is very difficult to break," he added.

Election Overlay Holiday Season Buff

The 'doomsday consumerism' related to the election happens right before the busy holiday shopping season. According to the consulting firm Morning Consult, about 20% of Americans plan to 'shop till they drop' using credit cards during this holiday season.

But their wallets are sounding the alarm. NerdWallet, after surveying 2,079 adults in September, found that around 28% of 2023 holiday shoppers are still paying off debts from the previous year.

"The credit card debt of Generation Z and Millennials is growing at the fastest rate," Alev said.

Alev cited Credit Karma membership data stating that since the Fed began raising rates in March 2022, Gen Z's credit card debt has increased by 66%, while Millennials' credit card debt has risen by 52%.

She said, the more debt you have, the harder it is to save money.

"We see these two things coming together, having a negative impact on the lives of many young consumers," she added.

Editor/ping