Bank survey: Consumers more cautious with discretionary spending, credit card choice

Four out of five U.S. consumers have had their spending habits affected by inflation, with more than half turning to discounts and promotions and seeking lower-priced options, according to a new survey by TD Bank. Groceries were the leading expense for 51% of respondents, with another 13% spending primarily on gas. Only 5% of consumers are spending the most on discretionary expenses like vacations, electronics and high-end retail items. Thirty-nine percent of respondents have also cut their discretionary budget in response to rising costs of living, and 27% have had to dip into their savings to keep up.

The survey also found that consumers are looking for low and no-interest solutions for their credit cards as interest rates rise. Eighty-nine percent of respondents said they would be interested in a credit card with no interest, and 42% ranked low or no fees as the feature they most valued in their card benefits, with cash back coming in second at 34%. Forty-eight percent selected no interest as the credit card feature they were most interested in, with customizable rewards coming in second at 25% and increased payment flexibility coming in third at 17%.

Forty-two percent of respondents had experienced a situation in the past that negatively affected their credit. The leading cause was incurring credit card debt (44%), which ranked higher than losing a job or source of income (32%) as a negative credit experience.