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Credit Card Confidence Index

Credit Card Confidence Index

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This article was last updated Jul 24, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

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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:

  • 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?

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: Credit Card Confidence Hits Another Two-Year-High Despite COVID-19 Pandemic

Consumers’ confidence in their ability to pay their credit card’s monthly statement balance in full this month hit another nearly two-year high in July, according to CompareCards’ Credit Card Confidence Index, with women driving most of the growth. 

Every month, CompareCards asks credit cardholders in the U.S. how confident they are that they can pay their credit cards’ monthly statement balance in full this month and why. They’re asked to rate themselves on a scale of 1 to 5, with 5 being very confident and 1 being not at all confident. We also ask cardholders how often they’ve paid their statement balances in full in the past six months and how often they expect to do so in the next six months. We then release those numbers each month as the CompareCards’ Credit Card Confidence Index. 

Key findings 

  • 69% of cardholders said they were confident in July, the highest percentage since the index was created in September 2018 (46% rated their confidence level as a 5 out of 5, while 23% rated it as a 4 out of 5).
  • The total percentage of confident cardholders has not decreased since November 2019.
  • Women were more likely than men to say they were very confident (48% of women versus 45% of men), a first in the history of the Confidence Index.
  • Women are also nearly twice as likely as men to say they are “not at all confident” (17% of women said so, compared to just 9% of men). However, that 17% number is the lowest for women since April 2019.

Overall confidence keeps climbing

Despite one of the worst economic crises our nation has ever seen, American credit cardholders’ confidence just keeps climbing. The total percentage of those who said they were confident in being able to pay their statement balance this month (meaning they rated their confidence either a 4 or 5 out of 5) is 69%, the highest seen in the nearly two-year history of the Index. 

This isn’t just a one-month spike either. Consider this:

  • The percentage of cardholders who said they are confident in paying their statement balance in full has not decreased since November of 2019. 
  • Meanwhile, the percentage of cardholders who said they are not confident (rating their confidence as a 1 or 2 out of 5) has increased just once during that same period. 

Also, 35% of cardholders expect to pay their statement balances in full in each of the next six months. That’s the second-highest percentage since January. 

Among cardholders who weren’t confident in their ability to pay their statement balance in full this month, the most common reason given was the COVID-19 crisis. Half of unconfident cardholders blamed the coronavirus pandemic, while 31% blamed a loss of income. Women (34%) were more likely than men (27%) to blame the lack of confidence on a loss of income, but women (50%) were equally likely as men (51%) to blame the pandemic.

Women lead the way

Since the Confidence Index was created in September 2018, we’ve consistently seen a significant gap in the way women and men view their ability to pay their card statement balances in full. 

That gap is still alive and well. For example, women are still twice as likely as men to say they’re “not at all confident” in paying their statement balances in full this month. (“Not at all confident” means you rated your confidence level as a 1 out of 5, while “very confident” means your level was 5 out of 5.) 

However, recent months have shown that the overall gap might be narrowing, and July’s report showed something unprecedented in the Index’s history: More women than men said they were very confident in their ability to pay their credit cards’ monthly statement balances.

That’s a major change. In the previous 22 months of the Index, the percentage of very confident men was on average 9 points higher than that of very confident women. In June, that gap was even higher at 11 percentage points. In fact, only once in the previous 22 months had the gap been less than 5 percentage points (a 4-point gap in May 2020). 

Major increases in the number of very confident women have made this possible. In January 2020, just 34% of women said they were very confident (compared to a record high of 59% for men). Today, 48% of women said they’re very confident versus just 45% of men. That growth has been slow and steady for women – there hasn’t been a decrease since January – whereas men’s confidence levels have been more volatile, ranging from 41% to 59%.

The bottom line

One of the biggest financial questions facing American cardholders in the coming weeks and months is whether the extra $600 per week provided in unemployment benefits will continue past the end of July. The answer to that question will go a long way in determining credit cardholders’ confidence for the rest of 2020. 

If the expanded benefits continue, then we will likely see cardholder confidence remain high. The truth is that many Americans are bringing home more income while unemployed than they did with their regular job. (That’s likely especially true for women, who typically earn less than men and who have been disproportionately likely to have suffered a job loss during the pandemic.) 

Because of that, people have been able to pay their household bills while also likely knocking down debt and perhaps even stashing away some extra money in savings. That’s not what happens normally during unemployment, but these are far from normal times. 

If the extra benefits stop or are curbed significantly, all bets are off. It suddenly becomes far harder for millions of jobless Americans to make ends meet. That likely means far more reliance on credit cards, which could lead to greater debt, more missed payments and big trouble for many Americans. 

The renewal of the extra unemployment benefits is obviously not the only big question remaining, but it is a huge one. The best thing people can do to prepare themselves for whatever happens is to keep building their emergency fund. We’ve seen a huge spike in the savings rate in America, so people’s financial margin for error might be a little bigger today than it was a few months ago.

The truth, however, is that your savings can never be too big. Even if you feel good about how much cash you have in your rainy-day fund, consider adding a bit more if you can because, unfortunately, we have no idea just when this current storm will come to an end.    

Prior months

Methodology

CompareCards commissioned Qualtrics to conduct an online survey of 1,003 credit cardholders, with the sample base proportioned to represent the overall population. The survey was fielded July 10-13, 2020. 


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