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Rising credit card balances are becoming one of the clearest signs of financial strain for many American households, and lawmakers are starting to take notice. Some officials are framing the surge in spending as a sign of economic strength, but others argue it points to growing pressure on households trying to cope with increasing bills.
Senator Bernie Sanders is among those sounding the alarm, warning that increased credit card use reflects growing financial pressure rather than prosperity. As prices for essentials like gas continue to climb, he argues that more households are being pushed to rely on debt just to keep up.
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Spending surge debate
The latest flashpoint came after National Economic Council Director Kevin Hassett described consumer spending as "through the roof," citing conversations with banking executives and recent economic data.
Retail sales rose 1.7% in March compared to February, according to the Commerce Department, suggesting households are still actively spending. At the same time, spending at gas stations jumped 15.5%, driven largely by higher fuel prices rather than a jump in discretionary spending.
Hassett framed the numbers as evidence of a strong job market and financially stable consumers. That interpretation, however, has not gone unchallenged.
Sanders posts warning
Vermont Senator Bernie Sanders pushed back forcefully on X, arguing that rising credit card use is a warning signal, not a sign of prosperity.
"Trump's chief economist is right: 'Credit card spending is through the roof,'" Sanders wrote in response to the comments. "Americans are forced to put more of their spending on credit cards because of outrageously high prices. That's a win for big banks charging 30% interest rates. It's a disaster for working people."
The concern centers on how households are managing rising costs. When everyday expenses outpace income growth, credit cards often become a fallback, allowing families to cover short-term gaps but potentially creating long-term debt.
Rising everyday costs
Fuel prices have played a major role in the recent surge in spending. The national average price for regular gasoline has climbed to about $4.50 per gallon, according to AAA, with prices reaching as high as $6.11 in California as of May 25. That marks an increase of more than $1 per gallon compared to a year ago.
The spike is largely tied to global tensions, particularly disruptions linked to the U.S.-Iran conflict and the effective closure of the Strait of Hormuz, a critical route for global oil shipments. Higher energy costs tend to ripple through the economy, raising prices for transportation, food, and a wide range of consumer goods.
Those increases can quickly strain household budgets, especially when wages do not keep pace.
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More Americans relying on credit
As prices rise, more Americans appear to be relying on credit to maintain their standard of living. A recent Bank of America analysis found that household spending on credit and debit cards increased by 4.8% in April compared to a year earlier.
In addition, more than half of U.S. adults are now using credit cards as a primary financial lifeline to cover basic necessities such as groceries, rent, and utilities.
Credit cards offer flexibility, but they also come with high borrowing costs. Interest rates approaching 30% mean balances can grow quickly if they are not paid off in full each month.
This creates a cycle where households use credit to manage higher costs, only to face even greater financial pressure as interest charges accumulate. Over time, that can erode savings and limit financial flexibility.
Rising fuel prices have had an uneven impact
A recent study from the New York Federal Reserve found that lower-income households are being hit the hardest by higher fuel prices. Households earning under $40,000 reduced gasoline consumption by 7% in March but still ended up spending 12% more due to price increases.
Higher-income households, by contrast, cut consumption by just 1% while increasing their total gasoline spending by 19%. That suggests wealthier consumers are better able to absorb higher prices without significantly changing their behavior.
For lower-income families, cutting back on usage is often the only option, yet it does not fully offset the financial impact.
Political pressure on the state of the economy
The debate over credit card spending comes at a time when affordability remains a top concern for voters.
Senator Elizabeth Warren echoed Sanders' criticism, arguing that rising costs are being overlooked in official messaging. "The Trump Administration is raising your costs and celebrating it on live TV," she said in response to the same remarks.
With midterm elections approaching, economic conditions are likely to play a central role in shaping voter sentiment. Rising costs for essentials such as fuel, food, and housing have already become key issues in recent polling.
Bottom line
Credit card spending may be climbing, but the reasons behind that increase are becoming a point of contention. Some policymakers see continued spending as a sign of economic strength. Others view it as evidence that households are struggling to keep up with rising costs and turning to debt as a result.
Spending remains strong, but for a growing number of households, it is being sustained by credit rather than rising financial security. As fuel prices and everyday expenses stay elevated, more Americans may look for ways to make cash on the side rather than rely further on credit.
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