43% Of Americans Report Using Credit Cards To Appear More Financially Well-Off – Forbes Advisor – Technologist

For those who said they typically use a credit card to fund purchases they wouldn’t otherwise be able to afford, the most common expense was dining out (44%). This figure was similar among Gen Z, Millennials, Gen X and Baby Boomers.

Other unaffordable purchases that respondents often used credit cards to pay for included clothing and accessories (40%) and leisure activities such as vacations and excursions (38%). Millennials were the most prominent in charging leisure activities (42%) while Gen X spent the most on clothing and accessories (45%).

In addition, 31% of respondents admitted using credit cards for monthly bills that they would not be able to afford otherwise. Of all the generations, Gen Z was the most reliant on credit cards to cover their bills (46%).

How Much Do Americans Charge to Their Credit Cards?

Among respondents who used a credit card to appear more financially well-off, 55% charged more than $250 monthly to cover purchases they wouldn’t otherwise be able to afford, and 14% charged more than $1,000 monthly per month. Gen Zers respondents were most inclined to charge over $1,000 in expenses to appear more financially well-off (20%).

Consequences of Using Credit Cards To Appear Financially Well-Off

While the best credit cards can earn you rewards or help you pay off a debt, they can easily become instruments of ruin if used irresponsibly or abused. Of the respondents who admitted to using credit cards to appear more financially well off, 39% reported maxing out their credit cards to fund expenses they couldn’t afford. This is a bad idea as credit card interest rates are high and can easily trap you in a cycle of debt.

Accruing unaffordable debt (and possible credit card delinquency) was also a common consequence experienced by 35% of these respondents, with Gen Z being the most affected generation (50%). Credit score damage was also commonly cited by all generations (31%). These consequences can have far-reaching effects that may take years to recover from, though there are steps you can take to improve your credit score and pay off your credit card debt.