Only 51% of Americans in a recent survey were confident that they could pay off their credit card bills this month – a big increase from the same time period last year. Every month, LendingTree conducts its Credit Card Confidence Index, and the December 2023 results are the worst since the survey began in September of 2018.
According to the report released last week, a “nationally representative” survey of American credit card holders showed that 49% did not think that they would be able to pay off their credit card bills this month. Only last month, the November survey results showed that only 42% were not confident about paying their bills. The previous low point was set in June 2022.
There are several contributing factors, outside of traditional holiday spending. In fact, a dip in confidence in December is not as common as you would assume – this was the first December since 2018 where monthly confidence dropped.
According to the LendingTree study, Gen Z cardholders reported the highest confidence levels, while Gen X showed the lowest levels – but both dropped since November’s study. December was the tenth month in a row that Gen Z had the highest confidence level in paying off their credit card bills – and the 22nd month in the last 25 where Gen Z came out on top. The biggest drop in confidence level came from millenials, with a drop from 63% in November to only 52% in December.
According to a report from Wells Fargo Economics last month, credit card debt is rising faster than any other category of household debt. The average American credit card holder carries over $6,000 in debt, up over $600 from the same period last year.
According to the LendingTree survey, women are more concerned about credit card debt than men. Since the survey began in 2018, women have always been less confident than men about paying off their credit card bills, but in December’s monthly survey, women’s confidence dropped even more.
Reduce your credit card debt to stay above water
If you have a higher credit score, you may qualify for a zero-APR credit card, which usually sets the monthly interest rate to zero for the first 12-15 months. If you transfer a portion (or all) of your balance to one of these cards, you will save a huge amount of money on interest during that period, which helps you to pay down your balance sooner.
If you have a lower credit score and do not qualify for one of these cards, you need to be diligent in following common tips for reducing credit card debt such as only buying what you can afford to pay off each month or even only using cash for purchases.
Will this lead to more bankruptcy cases in 2024?
While it is a bit too soon to know for sure, there are signs that 2024 will see an increased number of bankruptcy cases in the US. The national credit card balance is sitting at over $1 trillion – an all time high. The average interest rate on credit cards is 21%, which is the highest point in almost three decades. It is not that uncommon to find retail credit cards charging close to 30%. Student loan repayments are starting again, and we’re still experiencing rising inflation amid a recession.
For most Americans, the financial “margin of error” is incredibly small. Any unexpected financial event like job loss, an accident, or unexpected medical bills can cause debt to spiral out of control.
If you are currently struggling with credit card debt and worried you will not be able to pay your bills, call us any time at 214-760-7777 to schedule a free consultation with one of our experienced bankruptcy attorneys. We will explain all of your options, and if bankruptcy is the choice you make, we will help make the process as easy and stress-free as possible. Our goal is to help you get a fresh start on the road to financial security – call us today to schedule your free consultation!