Key Points
- Total household card spending rose 2.4% in October, the fastest growth in nearly a year.
- Despite higher spending, Americans are buying fewer items, showing the impact of inflation.
- Baby Boomers are driving spending growth, outpacing younger generations by a significant margin.
- Gen X carries the most credit card debt, averaging $9,600 per household.
As Americans head into the holiday season, they are using their credit and debit cards more than ever. But a closer look reveals a worrying trend and a deep divide between the generations.
According to a new report from Bank of America, household card spending jumped 2.4% in October compared to last year—the biggest increase in nearly a year. However, this doesn’t mean people are buying more. In fact, the total number of retail purchases actually went down. This suggests that rising prices are forcing Americans to pay more to get less.
The most striking part of the story is who is doing the spending. Baby Boomers are increasing their card use at a rate almost five times higher than younger generations. They are benefiting from stable income sources like pensions and investments. Meanwhile, Gen X is feeling the squeeze the most. Despite being in their peak earning years, they now carry the highest average credit card balance, a staggering $9,600 per household.
Younger generations are also struggling. They face high costs for rent, childcare, and student loans, which leaves little room for extra spending. Adding to the pressure, the significant pay bumps that once accompanied job changes have cooled off for younger workers, stalling their wage growth.
So while the overall spending numbers look strong on the surface, the reality is more complex. Older, wealthier households are driving the growth, while younger and middle-aged Americans are contending with high debt and the crushing weight of inflation.
