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For years, consumers have tried to keep up with the rising cost of living<\/a>, but some may be reaching their limit.<\/p>\n On Friday, the\u00a0personal consumption expenditures price index<\/a>\u00a0showed that consumer spending stayed strong even as inflation remains stubbornly elevated and the cost of food and other goods continues to rise.<\/p>\n However, Americans are now increasingly leaning on credit cards<\/a> to buy essentials like gas and groceries, according to TD Bank, which provided CNBC with an exclusive early look at its new credit card pulse check survey.<\/p>\n More from Personal Finance: Grocery prices rose by 2.7% in August from a year earlier, the fastest annual pace since August 2023, according to the latest consumer price index<\/a>.<\/p>\n Currently, groceries make up the bulk of credit card purchases for many Americans, with 46% citing it as their top spending category in a typical month, the TD Bank survey found.<\/p>\n Whether it’s a\u00a0dozen eggs<\/a>\u00a0or a pound of coffee<\/a>, Americans are having a hard time adjusting to current prices, other research<\/a> also shows. In a recent report by Wells Fargo, about 90% of consumers said they experienced some form of “sticker shock<\/a>,” particularly when it comes to buying food or a tank of gas.<\/p>\n “The things that people tend to notice more frequently become more prominent in people’s minds,” said Chris Fred, head of credit cards and unsecured lending at TD Bank.<\/p>\n Although gas prices<\/a> are down year over year, 13% of the more than 1,000 adults polled by TD Bank said that gasoline was their top credit-card spending category.<\/p>\n “There is a common misperception of credit card spending as frivolous, but that just isn’t the reality for most Americans,” Fred said.<\/p>\n In fact, such non-discretionary spending caused the most strain on household budgets, TD Bank also found: Nearly half, or 49%, of consumers said their spending on groceries increased the most over the last year, while 10% cited gasoline.<\/p>\n Credit card balances near an all-time high<\/p>\n Meanwhile, credit card<\/a>\u00a0balances have continued to rise, according to\u00a0research on household debt<\/a>\u00a0by the Federal Reserve Bank of New York.<\/p>\n Balances reached a collective $1.21 trillion in the second quarter \u2014 up 2.3% from the previous quarter and in line with last year’s\u00a0all-time high<\/a>.<\/p>\n Data from\u00a0Equifax<\/a>\u00a0also found that many consumers continue to spend, despite elevated prices and high borrowing costs.<\/p>\n “The presumption is, don’t borrow,” said Sheila Bair, former chair of the U.S. Federal Deposit Insurance Corporation. “The exception is a credit card that you pay off at the end of every month.”<\/p>\n Bair is also a member of CNBC’s\u00a0Global Financial Wellness Advisory Board<\/a>.<\/p>\n
How a government shutdown may affect your money<\/a>
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Education Department opens FAFSA ahead of schedule<\/a><\/p>\n