57% of consumers rely on credit cards to make
ends meet
SAN
MATEO, Calif., Aug. 5, 2024
/PRNewswire/ -- While inflation remains a lingering challenge
for consumers as they strive to make ends meet and pay their bills
on time, other financial challenges are starting to become a more
pressing concern, according to the results of a new study by
Achieve, the leader in digital personal finance.
![](https://mma.prnewswire.com/media/2475237/Achieve_survey.jpg)
Achieve's think tank, the Achieve Center for Consumer Insights,
surveyed 2,000 consumers with active accounts across categories of
consumer debt, including credit cards, mortgages and home equity
lines of credit, and auto and student loans. The survey format and
respondent panel are designed to complement the Federal Reserve
Bank of New
York's Quarterly Report on Household Debt and
Credit by providing qualitative insights into consumer
borrowing trends. To further examine the causes and ramifications
of rising loan delinquencies, the survey panel included a subset of
borrowers who were 30 days or more past due on their payments at
least once during the past six months.
Inflation's impact lessens
Job loss or reduced income was the leading reason consumers said
they have recently fallen behind on their bills, with 18% of
respondents citing this as the primary reason they missed a payment
on a debt account. Meanwhile, the share of consumers who cited
inflation as the primary reason they missed a payment on one of
their debt accounts fell by more than half in the third quarter, to
10%, compared to 21% during the second quarter.
While the share of consumers who said they missed a debt payment
because they didn't want to pay the bill remains low, the percent
who cited this as their primary reason grew both across all debt
accounts and among credit card, auto and student loan
borrowers.
"Recent positive news about the pace of inflation slowing, and
in some cases, even reversing course, appears to be overshadowed by
other financial concerns for struggling consumers," said Achieve
Co-Founder and Co-CEO Andrew
Housser. "In a sign of the beginnings of a choppy job
market, more and more consumers are being impacted by reduced
income or job loss. Combine that with interest rates still
near decades-long highs, and consumers with significant levels of
debt are finding it difficult to make ends meet."
57% of consumers rely on credit cards to get by
Over half (57%) of respondents in Achieve's survey said they are
carrying a credit card balance to cover the cost of essential
expenses, including 27% who said spending on living expenses has
accrued on their credit card balances for more than six months.
During the third quarter, 36% of consumers said it is very
difficult or difficult for them to pay their recurring debts on
time, a slight increase from 31% in the second quarter. Among these
respondents, 64% said paying their debts on time is challenging
because they don't make enough money to cover their spending.
Almost a third (32%) said having too many accounts to repay
contributes to their debt challenges, down from 39% last quarter.
The share of respondents who said timing cashflow between receiving
income and payment due dates was identical in the second and third
quarters, at 27%. Meanwhile, 16% said they have difficulty tracking
how much they owe across their accounts, up slightly from 14% last
quarter.
"Households that find themselves relying heavily on credit cards
to pay for basic necessities often get caught up in a cycle of
indebtedness that they cannot get out of," Housser said.
Economic optimism is growing
Consumer sentiment about how their financial situation has
evolved over the past three years is mixed, with a nearly even
share of respondents saying their situation has improved (37%) and
worsened (36%). But expectations for the future are much stronger,
with most consumers expecting their financial circumstances to
improve in both the short and long term. Over the next year, 56% of
consumers expect their finances will improve, with that rate
growing to 64% when asked about their outlook three years from
now.
Methodology
The data and findings presented are based on an Achieve survey
conducted in June 2024 consisting of
2,000 U.S. consumers ages 18 and older with an active account for
one or more of the following categories of consumer debt: auto
loan; major credit card with a minimum outstanding balance of
$100; first-lien mortgage; home
equity line of credit (HELOC); student loan; and other (unsecured
personal loan, store-branded credit card, buy now, pay later loan,
or closed-end home equity loan). The sample was augmented to
include a statistically significant subset of credit card, auto
loan and student loan borrowers who have been 30 days or more past
due at least once in the past six months.
About the Achieve Center for Consumer Insights
The Achieve Center for Consumer Insights is a think tank that
leverages Achieve's team of digital personal finance experts to
provide a view into the state of consumer finances. In addition to
sharing insights gleaned from Achieve's proprietary data and
analytics, the Achieve Center for Consumer Insights publishes
in-depth research, bespoke data and thoughtful commentary in
support of Achieve's mission of helping everyday people get on the
path to a better financial future.
About Achieve
Achieve, THE digital personal finance company, helps everyday
people get on, and stay on, the path to a better financial future.
Achieve pairs proprietary data and analytics with personalized
support to offer personal loans, home equity loans, debt
resolution and debt consolidation, along with financial tips,
education and Achieve MoLO (Money Left Over), a free mobile
budgeting app. Achieve has 2,500 dedicated teammates across the
country with hubs in Arizona,
California, Florida and Texas. Achieve is frequently recognized as a
Best Place to Work.
Achieve refers to the global organization and may denote one
or more affiliates of Achieve Company, including Achieve.com (NMLS
ID #138464); Achieve Home Loans, Equal Housing Lender (NMLS ID
#1810501); Achieve Personal Loans (NMLS ID #227977); Achieve
Resolution (NMLS ID # 1248929) and Freedom Financial Asset
Management (CRD #170229).
Contacts
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Erica Bigley
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Austin
Kilgore
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Vice
President
|
Director
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Corporate
Communications
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Corporate
Communications
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ebigley@achieve.com
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akilgore@achieve.com
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415-710-9006
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214-908-5097
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SOURCE Achieve