But other consumers who have remained unaffected by the pandemic are experiencing a surge in savings.
More “consumers are paying down debt and saving more than they have in decades,” according to Jessica Dickler of CNBC, thanks to government stimulus measures, a windfall from home refinancings, and limited opportunities to spend caused by pandemic lockdowns.
Americans paid down $83 billion in credit card debt in 2020, setting a new record, reports Dickler. Overall, the U.S. savings rate (the percentage of income that finds its way into savings or investment accounts) also reached new highs in 2020, although that high savings rate hides “a deep inequality” worsened by the pandemic.
Experts, however, do not expect this new austerity to last. They predict a surge in consumer spending – and a decline in savings – once COVID restrictions are lifted, adds CNBC’s Dickler.