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Credit Card Confidence Index

Credit Card Confidence Index

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Oct 28, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Want to talk to Matt about the latest Confidence Index numbers? Email him at [email protected] or reach out via Twitter at @matthewschulz

How are Americans feeling about their ability to pay off their credit card bills?

That’s what we track every month with CompareCards’ Credit Card Confidence Index — our exclusive monthly look at the mindset and payment habits of American credit cardholders.

Each month, we ask cardholders the following:

  • On a scale of 1 (not at all confident) to 5 (very confident), how confident are you that you can pay the monthly statement balance on all of your credit cards in full this month?
  • How many times have you paid all of your monthly statement balances in full in the past six months?
  • How often do you expect to do it in the next six months?

Those who rate their confidence a 1 or 2 are deemed not confident, while those who say 4 or 5 are deemed confident. We also ask those who say they’re not confident exactly why they feel that way. We then present our findings, along with my analysis on trends I’ve seen in the numbers and how they fit in the general context of the economy as a whole, each month in the Credit Card Confidence Index.

Bookmark this page. We update it every month with a link to the most recent Confidence Index post and the latest historical charts showing the Index numbers going back to its creation in mid-2018.

The latest: Another record high in October

Another month, another record high for the Credit Card Confidence Index.

In October, nearly 3 in 4 (74%) credit cardholders said they were confident in their ability to pay their credit cards’ monthly statement balance in full this month. That’s the second-straight month with record-high confidence levels.

Once again, there’s a huge gap in the way men and women view their financial situation. Still, there’s no denying that even though the COVID-19 pandemic still has a tight grip on the American economy, most cardholders feel far better about their ability to pay their credit card bills today than they did when the pandemic began.

Key findings

  • Credit cardholder confidence hit a record high for the second-straight month, with 74% of cardholders saying they were confident in their ability to pay their credit cards’ monthly statement balances in full this month.
  • Just 17% of cardholders said they were not confident, up a percentage point from last month’s record low.
  • Women were three times more likely than men (27% versus 9%) to say they were not confident. That gender gap is the second biggest on record.

Another record

The jump was only a single percentage point from September, but it was enough to push the Credit Card Confidence Index to a second-consecutive record high. It is also just the second month in the 26-month history of the Index in which 70% or more of cardholders said they were confident. And it continues a remarkable 2020 trend in which only one month (August) saw a decline in confidence.

Upon deeper examination, there were some small signs of slippage, though, including:

  • 54% of cardholders said they were “very confident” this month, rating their confidence a 5 out of 5. That’s down from 57% in September.
  • A slightly higher percentage of cardholders (17%, up from 16%) said they were not confident, rating their confidence as either a 1 or 2 out of 5.
  • Half of cardholders said they expect to pay their card’s monthly statement balance in full in at least five of the next six months, a four-percentage-point drop.

Still, even with those negative changes, the percentage of “very confident” cardholders was the second highest on record and the percentage planning to pay in full in five of the next six months was the third highest on record. Meanwhile, the percentage saying they were not confident equaled the second-lowest on record.

In short, cardholders still feel really good about their credit card bills, and there’s little reason to expect that to change in a big way anytime soon.

Gender gap widens slightly

A gender gap isn’t news for the Confidence Index: Men have been far more likely to be confident and women have been far more likely to not be confident in each of the Index’s 26 months of existence. A widening of that gap is significant, though, and that’s what we’re seeing.

October marks the third-straight month that the gap between the percentage of confident men and confident women has grown. This month, that gap is 21 percentage points, the third highest in the Index’s history.

The gap is widening on the other end of the spectrum as well. Women are now three times as likely as men (27% versus 9%) to say they are not confident in paying their card bills in full this month. That 18 percentage point gap is the second biggest on record.

The bottom line

These numbers support that credit cardholder confidence is soaring, even as the pandemic rages on, politicians continue to wrestle over future relief or stimulus packages and a tumultuous election season comes to a conclusion. Given all that, there’s little reason to believe that a reversal is coming anytime soon.

Still, the best thing that concerned cardholders can do to improve their confidence is to knock down any remaining credit card debt. One of the best ways to do that is by applying for a new balance transfer credit card. While it may seem counterintuitive to fight card debt with a new credit card, the best balance transfer cards can give you a year or more without having to pay interest on that transferred balance. That can save you a bundle along with shortening your payoff time.

You may also consider applying for a new cashback credit card. The best cashback credit cards come with no annual fee and will often give you $100 or more back after you spend a minimum required amount.

That $100 may not change your life, but it can extend your holiday shopping budget a bit. It can also be the difference between paying a card’s monthly statement balance off in full this month or carrying a small balance. That’s a big deal.

Whatever you choose, it is crucial to take some sort of action. Action breeds confidence, and while most Americans have loads of it right now when it comes to their credit card bills, millions of cardholders still don’t, so it is important to take whatever steps you can to change that.

Prior months

Methodology

LendingTree commissioned Qualtrics to conduct an online survey of 764 credit cardholders, with the sample base proportioned to represent the overall population. The survey was fielded Oct. 2-6, 2020.


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