Americans' confidence in their ability to pay their credit card bills continued to decline in September, according to a new report from CompareCards.com, as fewer cardholders manage to pay their statement balances in full at the end of the month.
CompareCards takes the pulse of the American credit cardholder every month, asking them how confident they are in being able to pay their credit cards' statement balance in full this month, how often they've paid in full in the past six months and how often they expect to do so in the future. The result is the CompareCards Credit Card Confidence Index.
For much of the past year, the Index showed a strong, confident credit cardholder, even in the face of more than $1 trillion of credit card debt. However, in the last few months, we've seen an unmistakable shift. Confidence has taken a hit, and fewer people are paying their bills in full.
It is unclear what caused the shift and how long it will last, but what is clear is that the data shows cardholders today aren't feeling as good about their credit card bill as they were just a few months ago.
- 23% of cardholders said they didn't pay their credit card bills in full a single time in the past six months. That's up 2 percentage points from last month, the fifth straight monthly increase. It also equals the highest percentage yet seen in the index.
- 38% of cardholders say they're very confident in their ability to pay their credit cards' statement balance in full this month. That's the lowest in the 13-month history of the index.
- 23% of cardholders say they're not at all confident in their ability to pay their credit cards' statement balance in full this month. This equals the highest percentage since CompareCards.com started the index over a year ago, tying the mark set in February 2019.
- Nearly 1 in 3 women (32%) said they're "not at all" confident, the highest percentage we've seen. Just 15% of men said the same.
- 41% of men said they're "very" confident, that's the lowest number yet seen in the index. (36% of women said so, a 1-point increase over last month.)
- 30% of cardholders said they paid their credit card bills in full in all of the past six months.
- 29% of women said they paid their cards' statement balance in full in zero of the past six months, a slight dip from last month. That's the same percentage that said they paid their cards' statement balance in full in all six of the past six months.
"Trillion-dollar credit card debt and sky-high card APRs are finally taking a toll on U.S. cardholders' confidence when it comes to paying off their credit card balances," said Matt Schulz, Chief Credit Card Analyst at CompareCards.com. "For years, Americans seemed to successfully navigate the growing debt, but it was only a matter of time before the mountain of debt started to cause real issues. For cardholders who are struggling with credit card debt, the primary focus should be on reducing expenses and paying down balances. For disciplined cardholders, balance transfer cards can provide some relief from expensive interest fees, when used responsibly. But all cardholders who routinely carry a balance should consider asking their card issuer for a lower rate - only 1 in 5 ask, but 81% of those who do ask see a reduced APR as a result."
To view the full report and for more information, visit https://www.comparecards.com/blog/study-confidence-ability-pay-credit-card-balance-low/.
CompareCards' mission is to help people make smarter, more informed, healthier financial decisions based on deeper knowledge of financial offers. Each month, over 2.9 million visitors come to CompareCards' website to independently compare credit cards side-by-side and choose a credit card based on interest rate, reward benefit, cost savings, and other factors that are important to each person. CompareCards, part of the LendingTree family of brands, provides easy-to-use, objective tools and educational resources that help people do everything from making credit card comparisons to managing their credit health. For more information, please visit http://www.comparecards.com.