The historic surge in the cost of living has even the top earners in America living paycheck to paycheck, one report shows.
Across the nation, American households are seeing a financial squeeze as the Consumer Price Index hovers at levels we haven't seen in 40 years. In April the Index increased 8.3% compared to April 2021's levels.
The prices of gas, groceries, homes, and more are all putting a strain on Americans' budgets. One analysis by LendingClub says that strain is felt even among people making the highest amounts of money.
The firm's report found that overall, 61% of American consumers are living paycheck to paycheck while 36% of people making $250,000 are doing the same.
"Earning a quarter of a million dollars a year is more than five times the national median and is clearly high income," Anuj Nayar, LendingClub's financial health officer told CNBC. "The fact that a third of them are living paycheck to paycheck should surprise you."
Using Credit Cards to Get By
The report also noted that those who are struggling day-to-day amid rising costs might rely on credit cards to get by, leading to carrying higher monthly balances and making them overall more financially vulnerable.
"I've seen households of all means fall into this trap," Fidelity financial consultant Joe Buhrmann told the outlet.
In the first three months of 2022, credit card balances reached $841 billion, the Federal Reserve Bank of New York reported. If this rate continues, credit card balances could reach historic levels as people place higher-priced gas, groceries, and essentials onto their credit cards to pay off later.
If you have revolving credit card debt, the Federal Reserve's move to increase interest rates may make the annual percentage rate on their credit cards increase, too.