As Financial Health Declines, Customers Try to Parse How New Tariffs Will Affect their Spending
Banking and Payments Intelligence Report
March 2025
As Financial Health Declines, Customers Try to Parse How New Tariffs Will Affect their Spending
As the inflation rate dipped below 3% in February, a whole new financial landscape has emerged for bank customers in the United States in light of new tariffs on foreign imports.
Earlier this month, the United States imposed a new 25% tariff on imports from Mexico and Canada. Accordingly, customers are trying to figure out exactly what that will mean for their finances, particularly those who are struggling.
According to JD Power data, 31% of customers are financially healthy,[1] a rate at which customers have been largely stuck since 2024. And even though the headline inflation rate has come down, many customers are still saying it affects their day-to-day decisions. Could tariffs start to have the same kind of effect?
Financial Health Returns to Baseline
After a slight upward swing, the number of customers who are financially healthy returned to 31% in February, while 46% of bank customers were in the vulnerable category. The rate of vulnerable customers represents a 13-month high.
The percentage of bank customers who say the cost of goods is increasing faster than their income rose to 67%. Healthy customers represented the biggest increase, up to 58% from 52% last month, a sobering metric that could portend a further decline in customer health.
Tariff Trouble?
Prior to tariffs taking effect on March 6, less than half (47%) of U.S. bank customers said that these tariffs would hurt their financial situation, while 27% said it would make no difference and 7% said it would help their financial situation. Nearly one-fifth (19%) of customers said they did not know. Meanwhile, bank customers in Canada had a more pessimistic view, as 60% said tariffs would hurt their financial situation and just 20% said they would make no difference. Eight in 10 (79%) customers in Canada said that tariffs would increase inflation, while 57% of U.S. customers agreed. Interestingly, 9% of U.S. customers said tariffs would lower inflation, compared with only 2% of customers in Canada.
Regardless of how tariffs affect the economies of the U.S. and Canada, one thing seems certain: Bank customers north of the border plan to buy fewer American products. Nearly three-fourths (74%) of customers in Canada say they will buy fewer U.S. products in light of tariffs, while 22% say it will not make a difference in their purchasing decisions.
Navigating the Uncertainty
As the U.S. begins to define carve outs for tariff exemptions, and companies rush to secure them for their products, it’s still unclear exactly what the end of result of these tariffs will look like. But for customers trying to find some certainty in a very fluid situation, banks have a chance to step in offer some stability.
Customers who are both dialed into the latest developments of this trade standoff and those that haven’t been paying attention are just as susceptible, and they’ll need guidance to get through it. Short of some momentary glimmers, the financial health of customers in the U.S. has been largely unchanged, even as inflation has fallen steadily since 2023. Banks that can keep their customers informed and help them chart a course through the clutter will stand to build better relationships.
Find out More
This Banking and Payments Intelligence Report is based on responses from 4,000 retail bank customers nationwide and was fielded in February 2025. It was authored by Jennifer White, senior director of banking and payments intelligence at JD Power. Please contact us at the numbers below to connect with Ms. White or to learn more about the underlying research.
Media Contacts
Brian Jaklitsch; East Coast; 631-584-2200; [email protected]
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
[1] JD Power measures the financial health of any consumer as a metric combining their spending/savings ratio, creditworthiness, and safety net items like insurance coverage. Consumers are placed on a continuum from healthy to vulnerable.