A customer shops at a Costco store in San Francisco.
Justin Sullivan | Getty Images
With sweeping U.S. tariffs going into effect, more Americans are concerned about the cost of goods and the possibility that prices will rise further in the months ahead.
Those fears are causing some consumers to spend even more than they would otherwise.
To that point , 19% of adults indicate they are “doom spending,” or making impulsive purchases driven by fear and anxiety about the future, according to a recent report by CreditCards.com
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President Donald Trump said earlier Thursday that his proposed 25% tariffs on products from Canada and Mexico will start March 4.
“It’s too soon to say precisely how the new tariffs imposed by President Trump are affecting consumer spending,” says John Egan, a personal finance expert contributor at CreditCards.com. “However, they very well could cause some consumers to rethink their buying habits, especially when it comes to major purchases.”
Fear of tariffs is driving more buying
To that end, 28% of Americans have already made a large purchase, such as a home appliance or home improvement supplies. Another 22% have also started stockpiling certain items, including non-perishable food, toilet paper and over-the-counter medications, according to CreditCards.com.
But these habits are also pushing 34% of credit card borrowers to take on more debt this year, the report also found. CreditCards.com polled 2,000 adults in February.
The downside of doom spending
“One of the drawbacks of doom spending is that it could prompt you to overspend and strain your budget,” Egan said. “In addition, doom spending might lead you to pile up credit card debt, which could put you in a financial hole due to interest charges and fees.”
As credit card debt tops $1.21 trillion, it’s more important to focus on paying down card debt rather than spending even more, experts say.
“Anyone who tells you they know what the next few months hold for the economy is just speculating,” said Matt Schulz, chief credit analyst at LendingTree and the author of “Ask Questions, Save Money, Make More.”
“It’s easy to feel powerless with so much uncertainty out there, but there are plenty of things you can do to take more control of your financial situation,” Schulz said.
“Two of the best things you can do are knocking down your high-interest debt and building your emergency fund, to the degree that you can,” he said. “Both are easier said than done, for sure, but both will put you in a better position to handle whatever situations come your way.”