We’re still a couple weeks away from Labor Day, but it’s probably not early enough to remind ourselves that consumers are paying more than $700 a month more on average for groceries, gas, and other goods and services than they did two years ago. Inflation rates may be going down, but month to month expenses for consumers remain up.

AFSA Chief Economist Tim Gill has documented all the numbers, including Bureau of Labor Statistics data over the past few months that shows the rate of inflation decreasing, which is a good thing. But lower inflation doesn’t mean prices are falling, just that they’re not rising as fast. BLS data shows that while grocery prices have leveled off in the last few months, the cost of food is up more than 23% since the start of 2020, providing a stark reminder that consumers continue to be under financial pressures, particularly so given potential expenses for back-to-school season.

This is also a reminder of why consumer access to such credit products as traditional installment loans remains important, particularly for those consumers who are underbanked or have less than stellar credit scores.  Traditional installment loans – with their equal monthly payments, no balloon or hidden fees, and an ability to pay review with a lender that also reports borrower performance to credit bureaus – offer consumers a safe, ethical and affordable alternative to predatory lenders that provide no such advantages.

With many consumers having paid out more than $7000 more annually for basic goods than they did pre-pandemic, tough choices will have been made for their household budgets. On top of that, consider that the average back to school cost is more than $500 per student. For a family of four with a household income of $100,000, inflation and seasonal costs add up to about 10% of their annual income. That is not insignificant by any standard.

It’s easy for well-intended policymakers and consumer advocates to suggest use of a credit card or a dip into savings or borrowing from a family member to bridge a financial gap or pay for an emergency.  Such views are probably drawn from their own experiences but don’t reflect the reality facing a large share of the population. More than one-third of Americans don’t think they can come up with $2,000 if needed. And credit cards, which are convenient tools for many consumers to extend their financial reach, are not always available to consumers with less than stellar credit or the underbanked.

As families across America prepare for the last gasp of summer with Labor Day and back to school, let’s consider the lessons of the past three years of inflation and of the ill effects of regressive policies like rate caps on households that needed access to credit and could not obtain it. Financial flexibility and access to some form of credit are crucial now more so than ever.