Inflation begins to strain finances of young, low-income Americans

NEW YORK, Aug 01 (Reuters): As high inflation forces Americans to spend more on gas and bills, young and low-income consumers are starting to feel financial pressure.
Generation Z consumers and those with low credit scores are falling behind on credit card and auto loan bills and accumulating credit card debt at a pace not seen since before the pandemic.
For instance, credit card balances for people ages 25 and younger rose by 30 per cent in the second quarter from a year earlier, compared with an increase of just 11 per cent among the broader population, according to a random sampling of 12.5 million US credit files compiled by credit score company VantageScore. Balances for non-prime borrowers, or people with credit scores below 660, rose by nearly 25 per cent over the same period.
For months, things have been looking good for US consumers, their bank accounts padded by government stimulus, student loan forbearance and pandemic-era savings. Bank executives have consistently said consumers have healthy financial cushions and are spending money despite high inflation and the slowing economy.