Intuit Credit Karma: Survey shows 27% of American consumers are engaging in "doomsday consumption"

As the US election progresses, not only are the two presidential candidates worried, but Americans are also very worried. So how do they deal with this worry? Surveys show that "retail therapy" seems to be effective, but their wallets can't bear it. According to a new report from Intuit Credit Karma, about 27% of consumers surveyed said they are "doomsday shopping" - that is, they keep spending money despite concerns about the economy and foreign affairs.

As the US election progresses, not only are the two presidential candidates worried, but Americans are also very worried. So how do they deal with this worry? Surveys show that "retail therapy" seems to be effective, but their wallets can't bear it. According to a new report from Intuit Credit Karma, about 27% of consumers surveyed said they are "doomsday shopping" - that is, they keep spending money despite concerns about the economy and foreign affairs.

This habit is more common among younger generations, with 37% of Gen Z and 39% of Millennials saying they do this.

More than half of Americans surveyed (60%) are worried about the state of the world and the economy, a higher percentage than a year ago.

The agency surveyed 1,001 American adults in late October and found that the top concerns of the "doomsdayers" include the cost of living (55%), inflation (43%) and the presidential election (28%).

According to the Intuit Credit Karma survey, more than a third (36%) of respondents said they couldn’t justify saving money due to global and economic uncertainty. Among Gen Z and Millennials, that number jumped to 47% and 43%, respectively.

Pursuing a sense of control

Courtney Alev, the agency's consumer finance advocate, said consumers may be looking for "a sense of control, especially during a time when it feels like a lot of things are out of control." "End of the world spending" has the greatest impact on young people because they happen to be "chronically online," or spend a lot of time on the internet and social media.

A Bankrate.com survey last year found that shoppers who made impulse purchases on social media spent an average of $754 a year.

To some extent, the impulse is "COVID-born," said Ted Rossman, senior industry analyst at Bankrate. The trend is especially prevalent among younger shoppers, who may feel "the odds are stacked against them," he said.

Financial distress

"Doomsday spending" could lead to greater financial distress. According to the Federal Reserve Bank of New York, U.S. credit card balances reached $1.14 trillion in the second quarter of 2024.

A recent Bankrate survey found that 50% of cardholders had monthly payments on their credit cards as of June. “The percentage that is paid in full is actually the lowest it’s been in four years,” Rossman said.

Cardholders are also carrying debt longer. About six in 10 people with credit card debt have been using their cards for at least a year, Bankrate found.

“It’s a cycle that’s hard to break,” he added.

Election and Holiday Buff

The election-related doomsday spending also comes just before the busy holiday shopping season, when about 20% of Americans plan to use their credit cards for purchases, according to Morning Consult.

But their wallets are sounding the alarm: About 28% of 2023 holiday shoppers are still paying off last year’s debt, NerdWallet found in a September survey of 2,079 adults.

“Gen Z and millennials are seeing the fastest growth in credit card debt,” Alev said.

Alev cited Credit Karma member data and said that since the Federal Reserve began raising interest rates in March 2022, credit card balances for Generation Z have increased by 66% and credit card balances for millennials have increased by 52%.

The more debt you have, the harder it is to save money, she said.

“We’re seeing these two things combined to have a negative impact on the lives of many young consumers,” she added.