Written by Bryan Lutz, Editor at Dollarcollapse.com:
Over the last six weeks, CEOs of major consumer brands have voiced growing concern over a widening gap between low- and high-income customers. There are fewer low-income customers spending in their stores — a trend economists refer to as a “bifurcating economy.”
Retailers are seeing this on the front end, while tightening access to credit on the back end reveals the real cause. It’s becoming harder for middle- and low-income individuals to maintain their quality of life. Meanwhile, higher-income individuals haven’t yet felt the same level of financial pressure.
This is what happens when national debt rises, inflation surges, and credit becomes harder to obtain. More and more middle- and lower-class citizens face a reduced standard of living, while those who own the majority of assets remain insulated.
Here’s what the CEOs of Best Buy and McDonald’s recently said…
The Street reports:
Best Buy CEO raises a red flag on an alarming economic trend
“She has help, of course, but the CEO needs to know months, and sometimes even further, in advance where consumer sentiment will land. If customers want value and Best Buy has nothing but luxury brands, sales will falter.
When it comes to big-ticket items like appliances, computers, and televisions, the price range on a single item varies greatly. Last year during Black Friday, for example, Walmart had 65-inch televisions under $300, while top-tier models in that size sold at Best Buy for over $1,000…
Best Buy is losing its lower-income customers. Those shoppers are heading to Walmart. High-income customers are staying with Best Buy, and that’s bad for long-term stability. It also affects mass psychology. Eventually, people start believing certain stores are “not for them,” reinforcing a system that privileges the few over the many.
At McDonald’s, even the classic burger, fries, and soda combo is becoming less affordable.
Soon, “splurging” may simply mean being able to afford a Big Mac Value Meal.
NBC News reports:
McDonald’s CEO warns of ‘a two-tier economy’ as lower-income consumers spend less
“McDonald’s is expanding its value meal menu. The reason suggests growing trouble in the economy, analysts say.
In an interview Tuesday on CNBC, McDonald’s CEO Chris Kempczinski said the move was in response to growing evidence of a divided consumer landscape: While upper-income households continue to spend freely, the rest are struggling.
“Particularly, with middle- and lower-income consumers, they’re feeling under a lot of pressure right now,” Kempczinski said. He added: “It’s really kind of a two-tier economy.”…
…By the start of 2025, the richest 10% of Americans, or those earning at least $250,000 a year, accounted for half of all consumer spending, a record, according to Moody’s Analytics. By comparison, the richest 10% accounted for 36% of all consumer spending 30 years ago.”
“Expanding the value meal menu” is a polite way of saying: “We now need a two-tier menu — enjoy.”
To truly understand what’s happening, watch the credit markets.
Credit is the foundation of the global financial system. If you want insight into the economy’s health, look there.
The creditworthiness of the average American is deteriorating. Credit scores are dropping, and the purchasing power of the average consumer is declining.
Bloomberg reports:
Credit Squeeze Is Driving Down Spending for Low-Score Americans
“Credit-card purchases in the US economy have increasingly been driven by borrowers with high scores, as less creditworthy consumers cut back on spending, a new report from the Federal Reserve Bank of Philadelphia shows.
Purchasing volume by borrowers with credit scores of 720 and above — the highest tier in the survey — has held at roughly the same levels since 2023 after adjusting for inflation, according to the Philly Fed’s Large Bank Credit Card and Mortgage data for the second quarter of this year, published Friday. In straight dollar terms the series hit a record high.
It’s a different story for borrowers in the lower tiers. Purchasing volume for those with scores between 660 and 719 fell by 5.4% in real terms compared to 2023, while for those in the lowest category it dropped by 8.5%. Those two groups are roughly equal in size and represent one-third of all credit-card accounts, the Philly Fed said.
The study is the latest indicator of diverging fortunes between wealthier and low-income Americans in the post-pandemic economic expansion that’s now more than five years old. Richer households have lately seen their spending turbocharged by wealth gains from the soaring US stock market, while poorer ones got hit hardest by the surge in inflation, especially for food prices.
The latter group may now be struggling to access credit. “The decline in real spending among consumers with weaker scores could reflect a greater reluctance to spend due to weaker household finances, or these borrowers could be constrained by their limited credit lines, some of which are already maxed out or close to the limits,” the Philadelphia Fed researchers wrote.”
A 720+ credit score is considered high middle-tier — yet the average U.S. credit score is only 715.
That means roughly 40% of U.S. states now average at or below the 720 threshold.
CNBC reports:
The average credit score in every state — how do you stack up?
“The average U.S. credit score is 715, according to FICO’s Score Credit Insights, which examined data from April 2025. That’s still in the “good” range, but it represents a two-point drop year-over-year — the largest decline since the Great Recession.
Persistent inflation and a sluggish job market have forced many Americans to rely more on credit to cover expenses. As a result, credit utilization has increased and on-time payments have decreased — both of which lower credit scores.
“Earlier this year, the percentage of credit card balances that were 90 days or more delinquent reached the highest level since the second quarter of 2011,” Credit Sesame analyst Richard Barrington told CNBC Select.…
…FICO’s analysis points to a deepening divide among consumers: The bracket with middle-range credit scores (600–749) shrank from 38% in 2021 to 33.8% in 2025. In the same time frame, the percentage in the “excellent” range (800-850) rose from 23.3% to 24.8% and the percentage in the “poor” range (300-549) jumped from 7.2% to 12.1%.
Says Barrington, “Scores are increasingly becoming split between the haves and the have-nots.”
That’s apparent when you look at credit scores by state, which range from lows of 677 in Mississippi and 687 in Louisiana to highs of 738 in New Hampshire and 739 in Wisconsin.
As the U.S. economy moves into a stagflationary environment, the divide between the haves and have-nots will only continue to widen. More and more Americans will be spending less as they try to hold on to what they do have.
2 thoughts on "The Divide Between the “Haves and the Have Nots” is Growing in the US"
The Democrats have totally sabotaged the financial ability of the Country. ZIRP killed the ability to grow wealth using the savings of the people in Local Regional Banks. They forced the pensioners into the market, took their money, and wasted their takes, and destroyed 40% of the wealth of the middle class under Obama. Included in that was 30% net wealth of the Black population. Then printed too much money we didnt have and wasted it on programs and things we didnt need.
It appears that your comment section has been taken over by 3 scammers pushing a website. Not sure how to fix that.
As far as your article goes, I know this is happening. I can afford it, but I typically stay out of stores that I feel are charging a premium as if their products are actually worth more. There can be exceptions of course, but if you don’t make the effort you will over pay. PT Barnum famously said, “There is a sucker born every minute, and another saying backs that up, “A fool and his money is soon parted”. I understand the situation of high and low credit scores. The ones in the middle are the ones who have to be careful or they will end up like the latter. I used to sell cars. Typically, a person with a high credit score was a shrewd negotiator. They were looking for the best deal and the best financing. Most of the low score types just wanted more credit that they had already proved they were not deserving of. They were late on most if not all bills with several charge offs, and these were not medical. They had no down payment, just a desire. Many times they were angry because you could not get them financed. The best scammers had perfected the game. They would bring in a letter proving they had a steady income from SS disability. They were healthy but would not work. They were also getting SNAP if they had kids, US gov housing assistance, and had their government issued EBT cards. They knew you knew and did not care. These people are parasites and they knew every trick. They knew not to default on their car payments and they would probably be approved for a new one when they got the itch. I would be driving used, but these people drove new. They deserve everything that is now coming to them and I applaud president Trump for holding them accountable. Unfortunately it is the middle tier of credit that will struggle the most. This country has been told, as long as you can make the minimum monthly payment you can afford what ever you want. That was never true but many have bought the lie, including the US government. We are getting ready to see what national bankruptcy looks like and there will be no one to bail us out.