Christopher Alarcon
Wealth of Geeks
Wealth of Geeks
About three-fourths (77%) of Americans own a credit card, according to a Quicken survey.
In mid-December 2023, the financial experts at Quicken, the popular personal finance software, shared the results of their survey examining Americans’ relationships with credit cards.
The survey reveals credit card use negatively impacts long-term savings in various demographics, and many families struggle to live within their means.
Since credit cards arrived in the United States in 1958, they seem to have created a nation where many — or most — Americans are dependent on them.
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Credit cards put Americans at odds with their beliefs
Americans believe you should prioritize living within your means, according to the results from Quicken. Even so, Americans across all adult ages and financial backgrounds are struggling to live within their means due to credit card debt.
Sixty-four percent of Americans reported that carrying a credit card balance is a bad idea. However, 45% of Americans carry a balance, with 51% earning between $50,000 and $90,000 and 36% earning at least $200,000 annually.
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Credit cards affect savings
There is a correlation between a higher dependence on credit cards and lower savings. Middle-class and younger Americans report that their savings wouldn’t last three months in the event of an income loss.
Still, Americans remain suspicious of credit cards. The Quicken survey shows that 71% of millennials, 69% of Gen X, and 68% of Gen Z respondents feel that multiple credit cards can result in overspending. A little more than half of boomers felt this way as well.
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Credit cards hurt financial health across income ranges
Although 81% of survey respondents think paying off credit cards is necessary rather than keeping a balance, 45% of Gen Z and Millennials say their balances have steadily increased over the last three to five years.
These problems affect consumers of all income ranges, even those who earn more than $200,000 annually. As mentioned before, 28% of survey respondents acknowledge that their savings wouldn’t last over three months if they lost their primary sources of income.
—————
Credit card debt is rising
According to Q2 data from the Federal Reserve, individual credit card debt rose by $45 billion in 2023, reaching $1.03 trillion from $986 billion in Q1 2023.
The Federal Reserve reports that the interest rate on a credit card as of May 2023 was an average of 22.16% for accounts with interest-bearing balances. This could put more financial stress on those with bigger debt loads.
The increase in credit card debt is alarming, particularly in light of the Federal Reserve’s recent initiative to raise interest rates to fight inflation. During inflation, the Federal Reserve tends to use interest rate increases to slow down the economy, bringing down inflation.
In April 2023, the Federal Reserve released the results of their 2022 study into noncash payment habits of American consumers and businesses. The 2022 Federal Reserve Payments Study shows that credit card payments in the United States grew 6.2% per year — almost $26 billion between 2018 and 2021.
—————
Most Americans own credit cards
According to a Consumer Financial Protection Bureau review in October 2023, three out of four American adults have at least one credit card account, and almost 4,000 companies produce credit cards. The top 10 credit card issuers account for 83% of overall credit card debt.
The Quicken survey shows that 77% of Americans own a credit card. Half of those in the $50,000–$99,000 annual income class range report using credit cards for most purchases, avoiding cash.
Even though most Americans are cautious about credit cards — 66% believe that too many can result in overspending — many Americans experience stress due to owning and using credit cards.
“Even with people knowing what they should and shouldn’t do with credit cards, they often make the mistakes anyway,” said Eric Dunn, CEO of Quicken, in a Quicken news release. “This suggests that many consumers don’t feel they have a choice. But credit card debt is costly, so as that debt rises, it really hurts people’s financial health.”
Dunn offers inspirational advice by emphasizing the value of creating a budget and monitoring spending to improve financial health, lessening the negative impacts of growing credit card debt on financial health and stability — “no matter who you are and how much you make,” he says.
More than half of Gen Z and Millennials report that their credit card balances have been steadily growing over the past three to five years. Almost half of these Americans are middle class; more than 35% earn more than $200,000 annually.
In mid-December 2023, the financial experts at Quicken, the popular personal finance software, shared the results of their survey examining Americans’ relationships with credit cards.
The survey reveals credit card use negatively impacts long-term savings in various demographics, and many families struggle to live within their means.
Since credit cards arrived in the United States in 1958, they seem to have created a nation where many — or most — Americans are dependent on them.
—————
Credit cards put Americans at odds with their beliefs
Americans believe you should prioritize living within your means, according to the results from Quicken. Even so, Americans across all adult ages and financial backgrounds are struggling to live within their means due to credit card debt.
Sixty-four percent of Americans reported that carrying a credit card balance is a bad idea. However, 45% of Americans carry a balance, with 51% earning between $50,000 and $90,000 and 36% earning at least $200,000 annually.
—————
Credit cards affect savings
There is a correlation between a higher dependence on credit cards and lower savings. Middle-class and younger Americans report that their savings wouldn’t last three months in the event of an income loss.
Still, Americans remain suspicious of credit cards. The Quicken survey shows that 71% of millennials, 69% of Gen X, and 68% of Gen Z respondents feel that multiple credit cards can result in overspending. A little more than half of boomers felt this way as well.
—————
Credit cards hurt financial health across income ranges
Although 81% of survey respondents think paying off credit cards is necessary rather than keeping a balance, 45% of Gen Z and Millennials say their balances have steadily increased over the last three to five years.
These problems affect consumers of all income ranges, even those who earn more than $200,000 annually. As mentioned before, 28% of survey respondents acknowledge that their savings wouldn’t last over three months if they lost their primary sources of income.
—————
Credit card debt is rising
According to Q2 data from the Federal Reserve, individual credit card debt rose by $45 billion in 2023, reaching $1.03 trillion from $986 billion in Q1 2023.
The Federal Reserve reports that the interest rate on a credit card as of May 2023 was an average of 22.16% for accounts with interest-bearing balances. This could put more financial stress on those with bigger debt loads.
The increase in credit card debt is alarming, particularly in light of the Federal Reserve’s recent initiative to raise interest rates to fight inflation. During inflation, the Federal Reserve tends to use interest rate increases to slow down the economy, bringing down inflation.
In April 2023, the Federal Reserve released the results of their 2022 study into noncash payment habits of American consumers and businesses. The 2022 Federal Reserve Payments Study shows that credit card payments in the United States grew 6.2% per year — almost $26 billion between 2018 and 2021.
—————
Most Americans own credit cards
According to a Consumer Financial Protection Bureau review in October 2023, three out of four American adults have at least one credit card account, and almost 4,000 companies produce credit cards. The top 10 credit card issuers account for 83% of overall credit card debt.
The Quicken survey shows that 77% of Americans own a credit card. Half of those in the $50,000–$99,000 annual income class range report using credit cards for most purchases, avoiding cash.
Even though most Americans are cautious about credit cards — 66% believe that too many can result in overspending — many Americans experience stress due to owning and using credit cards.
“Even with people knowing what they should and shouldn’t do with credit cards, they often make the mistakes anyway,” said Eric Dunn, CEO of Quicken, in a Quicken news release. “This suggests that many consumers don’t feel they have a choice. But credit card debt is costly, so as that debt rises, it really hurts people’s financial health.”
Dunn offers inspirational advice by emphasizing the value of creating a budget and monitoring spending to improve financial health, lessening the negative impacts of growing credit card debt on financial health and stability — “no matter who you are and how much you make,” he says.
More than half of Gen Z and Millennials report that their credit card balances have been steadily growing over the past three to five years. Almost half of these Americans are middle class; more than 35% earn more than $200,000 annually.
