Why 83% See Higher Prices but Only 38% Plan to Cut Spending

Younger consumers and families face the greatest concentration of financial pressure, particularly around housing, daily expenses and future planning.

For financial institutions and rewards programs, the data suggests a shift in how to forecast behavior. Traditional spending analysis starts with categories: travel, dining, entertainment, groceries, subscriptions. Consumers do not think that way. They evaluate spending through commitments, obligations and personal priorities. Family-related expenses, housing costs, childcare obligations and recurring household purchases receive protection even when budgets tighten.

That may increase the value of rewards programs tied to categories consumers are unlikely to abandon. For loyalty programs, it raises the importance of identifying where customers place spending within their hierarchy of priorities rather than relying solely on merchant categories.

Installment products have traditionally been associated with retail purchases. The broader opportunity may lie in helping consumers manage larger recurring expenses they view as important enough to preserve regardless of economic conditions. Families often work harder to protect spending connected to children, education, household operations and family support than many traditional discretionary categories.

The PYMNTS data does not point to a consumer preparing for a spending surge. Nor does it point to one preparing for widespread retrenchment. Consumers are entering the summer with a clear sense of which expenses matter most to them personally.

That reality complicates spending forecasts. It also creates opportunities for issuers and merchants who understand that essential is not a category. It is a person's choice.