Soaring energy prices are affecting lower-income Americans the most, with 69% of those earning $25,000 a year or less saying they are being forced to cut back on other spending

More than half of Americans (56%) say rising gas prices are a major concern for their household budgets and 32% say higher energy costs are a minor concern, according to the Cambridge Consumer Credit Index. Only 9% of Americans are not concerned about rising gas costs, while 2% do not purchase gas.

Moreover, 53% of Americans said that rising gas prices will force them to make sacrifices or cut back on other spending, while 47% of the respondents said their spending would not be affected by the rising gas prices. Soaring energy prices are affecting lower-income Americans the most, with 69% of those earning $25,000 a year or less saying they are being forced to cut back on other spending, compared to 34% of those earning over $75,000 a year.

"The results of the Cambridge Consumer Credit Index wildcard question show that soaring gas prices are causing a real hardship for many Americans, particularly low-income consumers. If gas prices continue to remain at current high levels or even rise more, consumer spending on other less essential items will clearly be reduced in coming months. For the roughly half of Americans that already have burdensome debt loads, high oil prices are making it that much more difficult to keep up with their financial obligations," says Jordan Goodman, spokesperson/financial analyst for the Cambridge Consumer Credit Index.

These findings are the result of monthly nationwide telephone poll of 1000+ adults conducted by ICR/International Communications Research in the past week, sponsored by the Debt Relief Clearinghouse.

The overall Cambridge Consumer Credit Index fell by 7 points in June to 61. The Index fell in all three of its component questions. The "Reality Gap," which is the difference between the amount of debt consumers say they will pay off in the next month versus the amount of debt they actually paid off a month later, narrowed by 8 percentage points from May to 8 points. A month ago, 75% of Americans planned to pay off debt, while a month later only 67% actually did so.

According to Chris Viale, acting President and CEO of Cambridge Credit Counseling Corp., "As gas and energy prices continue to rise, it is discouraging yet not surprising that the overall percentage of Americans who plan to pay off debt has decreased. With less disposable income to spend each month on other living expenses, it is imperative that consumers evaluate their overall budgets and cut back in other areas to counteract these increasing costs. Paying off debt should always remain a top priority. You can maintain your current standard of living and get closer to becoming debt free -- all it takes is a little planning and some dedication."

The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board's G19 release of consumer credit outstanding data.

In conjunction with the Index, the Cambridge Credit Counseling Corp. is releasing its monthly survey of people who have called in for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now. Of the 465 people who answered, this was the order of their responses:

1. I am frustrated with high bank rates and fees (33.6%)

2. My income has been reduced from a lower salary, less overtime or
layoff (21.2%)

3. I want to improve my ability to achieve future financial goals like
buying a house or saving for retirement (16.5%)

4. I got into too much debt by overspending (8.2%)

5. Large medical expenses forced me to take on huge debts (6.6%)

6. My lack of financial education caused me to take on too much
debt (6.6%)

7. Other (4.9%)

8. Recently divorced or widowed (3.8%)

The Cambridge Consumer Credit Index number is a composite of these three questions:

1. In the past month, have you taken on more debt or paid off debt?
The Index reads 66 on this question, a drop by two points from May.

In June, 33% of Americans say they have taken on more debt, with 19% taking on a little and 14% taking on a lot more debt. Conversely, 67% of Americans have paid off debt, with 48% paying off a little and 19% paying off a lot.

2. In the next month, do you anticipate taking on more debt or paying off debt? The Index reads 38 on this question, a drop of 14 points from May.

In June, 19% plan to take on more debt, with 5% planning to take on a lot and 15% planning to take on a little debt. Conversely, 81% plan to pay off debt, with 65% paying off a little and 16% paying off a lot. In May, 26% planned to take on debt and 74% planned to pay off debt.

3. In the next six months, do you expect to take on debt because you are thinking of making a major purchase such as a car, education, appliance, medical procedure, furniture or carpeting? The Index reads 78 on this question, down by six points from May.

In June, 39% of Americans plan to take on more debt to make such purchases, with 14% taking on a lot of debt and 25% taking on a little more debt. In contrast, 61% of Americans plan to pay off debt in the next six months, with 47% expecting to pay off a little and 14% expecting to pay off a lot. In May, 42% of Americans planned to take on more debt, while 58% planned to pay off debt.

"The results of the Cambridge Consumer Credit Index indicate that consumers are becoming more cautious about taking on more debt, as the overall index number dropped by 7 percentage points from last month's record highs. The most significant pullback in expectations of credit use was in the next month category, showing that high gas prices are starting to temper consumer's plans for discretionary spending on other items in the immediate future," says Jordan Goodman, spokesperson for the index.