BofA says that consumers’ finances may be better because they have cut back on spending.

Takeaways

• Bank of America data, released on Tuesday, shows that Americans held fewer revolving card balances than they did a year before.
• The report stated that the median balances of checking and savings have been increasing from February to March.
• The research found that lower-income households, although they are in a much better position than before the pandemic, are still showing signs of strain.

Consumers are reportedly securing their finances. 

Bank of America reported Tuesday that Americans of all income levels are carrying less credit card debt and are replenishing savings and checking accounts that were depleted during high inflation.

Bank of America revealed that the percentage of Americans with credit card balances in March decreased compared to last year’s same time and 2019. The bank also reported that the median balances of checking and savings accounts have been steadily increasing from February to March. 

Bank of America stated that deposits were 15% higher in 2019 after inflation was taken into consideration. The research team concluded that consumer finances were in better shape before COVID but lower-income families are showing signs of stress.

“While many consumers remain in good financial shape, they may be cutting back on ‘nice to have’ discretionary spending like travel and leisure activities in order to do so,” the report said. 

Earnest Analytics, an analysis firm, says that consumers are spending less on clothing, accessories and other items.

In a recent report, the firm stated that “Consumer spending has a rough start in 2025 due to trade policy uncertainty driving record-low sentiment.” “Some categories feel the pain already, while other categories appear to be more resistant as consumers adjust their spending habits.”