Survey Reveals: 60% of Credit Card Debt in the U.S. Held by Americans Living Paycheck to Paycheck

The majority of American credit card debt is owed by people who live paycheck to paycheck, according to a recent survey.

According to a PYMNTS and LendingClub poll conducted in November 2023, 62% of consumers rely on their next salary to satisfy their monthly expenses. Additionally, around 60% of credit cards in the US are owned by these customers. Furthermore, an average of 80% of consumers living paycheck to paycheck had two or more credit cards.

According to the survey, credit cardholders who are living paycheck to paycheck are more than twice as likely to carry over their credit card amount to the next month as those who do not. Nearly one-third reported that, at least some time in the previous year, they had used their credit card to the maximum amount—an average of $9,200.

According to a recent Federal Reserve Bank of additional York study on household debt, Americans racked up a combined $48 billion in additional spending during the third quarter of 2023, leaving them with $1.08 trillion in credit card debt.

Consider taking out a personal loan with a reduced interest rate to pay off high-interest debt if you’re having trouble making ends meet in the current uncertain economic climate. To examine your alternatives without compromising your credit score, go to Credible.

40% of those who barely make ends meet have excellent credit scores. According to the report, 40% of customers who live paycheck to paycheck still have super-prime credit scores of 720 or better, despite their mounting credit card debt. Additionally, these customers are more likely to make regular purchases with debit cards rather than credit cards, indicating their dedication to living within their means and maintaining their flexibility to maintain their creditworthiness.

Consumers check their credit scores on average every 76 days, and 80% of them stated they are very significant, regardless of their financial lifestyle. Additionally, the study found that when selecting a credit card, customers living paycheck to paycheck place the highest value on split payment plans and bigger credit limits.

Survey Reveals 60% of Credit Card Debt in the U.S. Held by Americans Living Paycheck to Paycheck (1)Enrollment of millennials in debt relief programs has increased. According to a new Achieve poll, consumers are now experiencing financial difficulties earlier in life. After the pandemic, Americans’ average age at which they seek assistance to pay off debt has dropped, from 52 in 2020 to 44 in 2023. The largest change was observed in the millennial generation, which accounted for 39% of program participants in 2023 compared to 25% in 2020.

The majority of Americans are struggling with mounting debt. According to the Federal Reserve Bank of New York, credit card balances increased by $154 billion in a single year, marking the largest growth since 1999. All told, debts rose by $786 billion from the previous year, with vehicle loans accounting for $71 billion of that rise. Debts now amount to $1.6 trillion, continuing their rising trend from 2011.

The quantity of customers who fail to make their debt payments is also increasing. According to the New York Fed, credit card delinquencies increased for all debt categories except home equity lines of credit and student loans. According to the New York Fed, Millennials, or borrowers between the ages of 30 and 39, who are also heavily indebted on their student loans, saw the biggest rises in credit card delinquency.

“These repayment difficulties will likely continue to mount for student loan borrowers, now that student loan payments have resumed,” the Federal Reserve Bank of New York stated.

To find out more about your alternatives and ask any questions you may have, visit the Credible marketplace if you’re interested in using a personal loan to pay off high-interest debt.

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