Business Insider reports the US economy could see a sharp drop in consumer spending in the coming months.
That’s because personal income for millions of Americans is about to take a serious hit.
Enhanced unemployment benefits that gave millions of consumers an additional $600 weekly lapsed at the end of July.
What’s more, the US government appears far from passing a new stimulus package that would give consumers more funds.
Such a drop in consumer income and spending could cause credit card issuers’ recovery to backslide, introducing new problems regarding credit card debt.
The industry could respond by reducing credit card rewards programs.
However, issuers still may face a higher default rate when customers are forced to use credit cards to cover their daily living expenses.
