Survey Finds Americans Relying More on Credit Cards
Credit-Cards-Overtake-Debit-Card-Payments-for-More-Americans

Survey Finds Americans Relying More on Credit Cards

With the economy hitting some sour notes, it looks as though the use of credit is on the rise. According to Credit Sesame’s latest Personal Finance and Credit survey, Americans are relying more on credit cards now than they were last year. In fact, the percentage of respondents who reported using more than half of their available credit limit increased by nine points when compared to last year’s survey. Additionally, 47% of those surveyed this year said they preferred credit cards to debit cards (40% chose debit). This was a near inverse of last year when 46% stated a preference for debit compared to 40% for credit.

Unfortunately, Credit Sesame’s survey also found late payments among consumers were on the rise. This year, 15% of respondents noted late credit card payments versus 10% in 2021. Meanwhile, more than one-third (34%) of those surveyed said that they spend more than 90% of their paychecks on expenses each month. This was double the 17% who said the same last year. Similarly, the percentage of those who said they spend more than 100% of their paycheck each month rose from 6% to 11%.

Of course, the increasing reliance on credit is understandable given the four-decade high inflation the United States is currently enduring. However, increases in interest rates could hurt debt-carrying consumers even more. Recently, the Federal Reserve increased interest rates by 0.75% — the biggest single rate hike since 1994.

Also concerning is that a number of those surveyed displayed a lack of knowledge about their personal credit. For example, 1 in 6 surveyed did not know their credit score. What’s more, a surprising 40% didn’t realize that lenders utilize credit scores to evaluate creditworthiness.

Commenting on the survey’s findings, Credit Sesame CEO Adrian Nazari explains, “Inflation and economic adjustments affect us all, but understanding, and improving your credit score can protect against these rising costs and interest rates.” Nazari added, “The results of this survey prove how important it is for Americans to take care of their credit health to stave off the negative impact of any economic downturn.”

All in all, there are many concerning aspects of Credit Sesame’s Personal Finance and Credit survey. Moreover, while economic factors are impacting the results already, there could be more bad news on that front as a recession is widely expected. Alas, although consumers may be having a hard time with their finances overall, one thing they can do is check their credit score and educate themselves on the elements that go into said scores. Armed with this info, hopefully consumers will be able to make better financial decisions as we navigate what’s ahead.

Leave a Reply

The "Email" field is empty, you must enter some text to proceed.The text you entered in the "Email" field appears to be invalid, please edit it and try again
Get the Latest News Delivered to Your Inbox

A Guide to Building Credit and Increasing Your Credit Scores

When it comes to credit, there’s some good news. The average credit score in the United States has been steadily rising in recent years, coming in at 715 in 2023. That may be because, today, consumers not only have more ways to access their credit reports and scores than ever before but also because there are an increasing number of options that Americans have for building credit in the first...

2024 SoFi Checking and Savings Review

Ever since I started taking an interest in the FinTech sector, one company whose name I’ve seen pop up over and over again is SoFi. Lately it seems as though that theme has been sent into overdrive as the company has not only become a household name thanks to its stadium naming rights deal but also because of the company’s continued product expansions. The most interesting development in my mind...
Brim logo

Brim Financial Raises $85 Million as It Eyes Global Expansion

Toronto-based FinTech infrastructure startup Brim Financial has announced a new funding round. About the round: Brim has revealed an $85 million round. The Series C was led by EDC Investments while new investor Vistara Growth and returning investors White Owl Group, Epic Ventures, and Zions Bank also participated. To date, the company has now raised $110 million including a Series B in 2021. According to Brim, the latest funding will...
Chase Freedom Flex card

Chase Reveals Q2 2024 Freedom 5%(+) Bonus Categories

Chase has announced its bonus category picks for the second quarter of 2024 — including some interesting twists. About the categories: As April approaches, Chase has revealed what categories Freedom and Freedom Flex cardholders can earn bonuses on. From April 1st through June 30th, customers can earn 5% (or more) in three categories: Amazon.com, Hotels, and Restaurants. Similar to how Chase embraced a "New Year, New Me" theme last quarter,...
Rent Day

Bilt Announces Home Collection Deal for May 2024 Rent Day

For May's Rent Day, Bilt is offering a deal that will allow members to decrease their rent bill while also adding to their home decor. About the Home Collection offer: Bilt has crafted a unique Rent Day offer for May 2024. Through the 1st, when Bilt members redeem their points toward rent payments, they'll receive the same number of points to be used toward Bilt Home Collection items. To take...