American consumers put their credit cards on ice over the last couple of months.
According to a new report by the JP Morgan Chase Institute, credit card spending cratered 40 percent in March and April compared to last year as more consumers stayed home and looked at their stamp collections.
And this was seen across all income brackets.
Unsurprisingly, it had more to do with Americans placed under stay-at-home orders than job losses.
Diana Farrell, president and chief executive of JPMorgan Chase Institute, said in a statement:
“While surprising, we expect this may change over time as layoffs, furloughs and unemployment insurance further impact families’ bank accounts.”
More from Reuters:
The JPMorgan Chase Institute studied anonymized spending data from more than 8 million Chase credit card customers for the period from March 1 to April 11.
Credit card users who report household incomes of less than $39,000 reduced spending by 38%, while wealthier cardholders, with incomes of more than $92,000, reduced spending by 46%. The group says the difference largely reflects higher average spending by wealthier households.
The report showed essential spending, like on groceries and healthcare, initially spiked by 20% before falling back.
Spending on non-essential things fell by 50% and dropped 70% on restaurants.
Will this teach consumers to rely more on their physical cash than pieces of plastic?
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