Forty-two percent (42%) of Americans Are Making Minimum or No Payments on Their Credit Card Balances

Friday 5 March 2004 13:49 CET | News

Over four out of ten Americans (42%) are making just minimum payments or no payments on their credit card balances, according to the Cambridge Consumer Credit Index.

Of those respondents surveyed with revolving balances on their credit cards, 39% made only the minimum payment due and 3% made no payments at all last month. Another 39% paid less than half the balance owed but more than the minimum, while 19% paid more than half their balances. In 2003, 46% of Americans surveyed paid just the minimum (40%) or made no payment at all (6%). The Cambridge survey also asked Americans who are taking on more debt why they are doing so. 49% of the respondents (up from 44% in 2003) said they are adding debt because they dont have the funds to pay for the purchases in full when the credit card bills arrive, while 51% of Americans (down from 56% in 2003) are taking on debt because they are confident of their ability to pay the balance off in full. Overall, 39% of Americans paid off their credit card balances in full last month (down from 43% in 2003), 32% extended their payments (up from 31% last year), while 29% did not use credit cards at all in the last month (up from 26% a year ago). These findings are the result of monthly nationwide telephone poll of 1000+ adults conducted by ICR/International Communications Research in the past week, sponsored by the Debt Relief Clearinghouse. The overall Cambridge Consumer Credit Index rose in March to 59, six points higher than in February. The Index rose in two of its three component questions. The Reality Gap, which is the difference between the amount of debt consumers say they will pay off in the next month versus the amount of debt they actually paid off a month later, increased to 12 percentage points from 7 points in February. A month ago, 85% of Americans planned to pay off debt, while a month later 73% actually did so. Wild Card Question: When you received your credit card bill this month did you: March 2004March 2003 March 2002 Pay off bills in full39%43%37% Extend payments 32%31% 32% Did not use credit cards 29% 26%30% Of those extending payments: March 2004March 2003 March 2002 Paid minimum payment 39%40%47% Paid less than half the balance 39% 37%37% Paid more than half the balance 19%17%13% Made no payment 3%6%3%

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Categories: Payments & Commerce | Payments General
Countries: World
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