Nearly a third of American consumers dip into their savings to pay off credit card debt, according to a new report from PYMNTS.
03/26/2023 12:30 P.M.
1.5 minute read
A January 2023 report from PYMNTS found that around 27% of consumers are using their personal savings to manage credit card debt. This finding comes as the percentage of Americans living paycheck-to-paycheck (60%) dropped four percentage points from the year prior. The report also finds that the share of consumers expecting their financial situation to worsen has also decreased, and more people are optimistic about 2023.
The findings from PYMNTS, partnering with LendingClub, draw on insights from a survey of 4,163 U.S. consumers conducted from Jan. 6 to Jan. 27, 2023, as well as analysis of other economic data.
Additional findings from the report include:
- “Seven in 10 consumers report taking additional measures to manage credit card debt.
- Thirteen percent of consumers say the holiday season brought a highly significant increase to their debt burden.
- Among paycheck-to-paycheck consumers, 84% are taking extra steps to manage debt, even as 20% of them are using credit cards less due to their tight financial situations.
- Fewer consumers expect their financial standing to worsen, indicating that they have settled into the new economic environment and adjusted their spending behavior to lessen the impact on bottom lines.
- Fifty percent of paycheck-to-paycheck consumers are cutting back on daily perks to better manage their debt.
- Credit cards are a popular choice for consumers in periods of high spending, yet struggling paycheck-to-paycheck consumers are less likely to have credit cards available in such situations.
- Eighty-seven percent of cardholders report not experiencing a significant financial hangover from their 2022 holiday season, thought struggling consumers are less likely to agree.”
Read more findings from the report here.
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