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Fewer Americans – Especially Women – Are Paying Their Credit Card Balances in Full

Fewer Americans – Especially Women – Are Paying Their Credit Card Balances in Full

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This article was last updated Aug 21, 2019. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Women are more likely to say they never paid their credit card statements in full once in the past six months than to say they did so every month, according to a new report from CompareCards.com, further proof of a major gender gap when it comes to credit card payments. 

Overall, Americans are paying their credit card statement balances in full less often and feeling less confident about doing so in the future than at any time in the past year, with women struggling the most.

Every month, CompareCards conducts the Credit Card Confidence Index. In this survey, we ask cardholders to rate their confidence in their ability to pay their monthly credit card balances in full in the current month, as well as asking how often they’ve paid their balances in full in the past six months and how often they expect to do so in the future. 

The goal is to get a sense for how Americans see their own financial situation. For most of the past year, confidence has been consistently high. However, in recent months, we’ve started to see signs that Americans’ $1 trillion debt is taking a toll on their confidence, especially among women. 

Key findings:

  • Women are more likely to say they never paid their bills in full once in the past six months (31%) than to say they do so every time in the past six months (28%). That’s the first time that’s happened in the past year. (That’s a stark contrast to men: 32% of men said they always paid in full, compared with just 10% who said they never did.)
  • 21% of cardholders said they never once paid their cards’ monthly statement balance in full during the past six months. That’s the fourth straight monthly increase and the second highest percentage in the past year.
  • 30% of cardholders said they always paid their cards’ monthly statement balance in full in the past six months. That’s the lowest percentage in the past year.
  • For the second straight month, 40% of cardholders said they were “very confident” in their ability to pay their credit card monthly statement in full this month. That matches the lowest percentage in the past year.

The bottom line: The tide may be turning.

We saw a large drop in confidence in the July index, but it was so large that it looked like it might have been an anomaly. After seeing August’s numbers, that may no longer be the case. 

For the second straight month, only 40% of cardholders said they were “very confident” in their ability to pay their statement balances in full this month. In the eight months prior, that number never dipped below 46%. 

Combine that with a fourth straight monthly increase in the number of cardholders who say they didn’t pay their statement balance in full a single time in the past six months, and a clear picture emerges: Americans are feeling less confident about their finances today than they did a few months ago. 

It is especially true for women, who have typically been about 9 percentage points less confident about their finances than their male counterparts over the 1-year life of the Index. They also have typically said they pay their statement balances in full less often. About 1 in 3 female cardholders (31%) said they haven’t paid their statement balance in full once in the past six months. That’s the highest percentage seen in the past year.

That’s not surprising, given the well-documented financial headwinds that many women face. They are typically paid less than men, are more likely to lead single-parent households than men, and are likely to have far less financial margin for error than men. None of those factors are going to change anytime. In fact, when an economic downturn comes, those issues may only get worse.

When you factor in the recent decline in stock prices and rising concerns about a possible recession coming in the next year or two, this downward trend in confidence seems likely to continue. I’m not expecting the bottom to fall out, confidence-wise, but I’m also not anticipating a rebound either. 

Ultimately, what this all means is that it is a perfect time to focus on knocking your credit card debt down and on trying to put some extra money away for a rainy day. It may not be easy, but even adding an extra $10 or $20 to your credit card payment each month can draw you a little bit closer to your payoff day. If you’re able to go beyond that and put some money away in an emergency fund – again, even if it’s just a few dollars a month – all the better. 

Remember that when you carry debt during good economic times, you end up making it harder for yourself when the economy hits the skids. That’s because you didn’t put enough rainy-day money away when you had the chance. Don’t let that happen to you. Here are a few things you can do:

  • Make a budget and stick to it.
  • Sell something of value that you don’t use anymore.
  • Try starting a side hustle.
  • If things are really tough, consider adding a part-time job.
  • Reduce expenses by cutting out things you don’t need.

Some of these things are simple, others more difficult. Life’s really expensive in 2019. Even little moves can help you extend your budget, and that can make you more confident in your finances going forward. 

Methodology

CompareCards by LendingTree commissioned Qualtrics to conduct an online survey of 731 American credit cardholders, with the sample base proportioned to represent the general population. The survey was fielded Aug. 1-5, 2019, and the margin for error for all respondents is +/- 3.6%.


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