Quicken survey shows Americans are sinking money they don't have into credit cards they can't pay off - at alarming rates

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Jul 25, 2023, 10:00 ET

39% of Americans are living paycheck to paycheck without an end in sight – and their reliance on credit cards and return to paying student loans is cause for concern

MENLO PARK, Calif., July 25, 2023 /PRNewswire/ -- Quicken Inc., maker of America's best-selling personal finance software, today shared findings from a survey that explored Americans' financial outlook amid the current economic climate. Many Americans are deeply reliant on credit cards, with some fearing they will have a harder time paying them off this year than last year. Attitudes toward and behavior in response to economic conditions vary greatly by generation and income bracket – telling a tale of two Americas – one prospering, and the other faltering.

Credit card usage (or more urgently, reliance) is cause for alarm for millions
Despite credit card interest rates hovering just above 20%, two in five Americans with credit cards report being more dependent on their credit cards than ever before – especially Millennials (53%) and Gen Z (41%). Over a third (35%) of Americans using credit cards say they will most likely max out at least one of their cards before the end of the year, with 38% reporting they will likely need to use a credit card to cover expenses they previously weren't using it for. This increased reliance on credit cards is likely to lead many even deeper into debt – which is especially troublesome with interest rates well into the double digits.

More than a third (35%) of Americans with credit cards admit they won't be able to fully pay off those card(s) before the end of the year. This even applies to the upper class of earners with an annual income above $150,000: one third (34%) of those who use credit cards in this income bracket say they are going to have a harder time paying their cards off this year than they did last year. One in four (25%) Americans say they need to cut back on their spending because they are currently buried in credit card debt.

"Our research shows an economic divide that is widening among Americans – there is a large group of hard-working people who are still struggling financially," said Eric Dunn, CEO of Quicken. "I'm troubled by the compounding problems facing this group – many of them are living paycheck to paycheck and relying on credit cards they may not be able to afford. It's clear that strong financial planning is more important than ever to help Americans break this cycle and start closing the gap."

External factors are driving Americans to work more and spend less
Thirty-nine percent of Americans think the current state of the economy will impact their finances negatively. This concern comes as Americans face a compounding number of financial issues – ranging from inflation, to unemployment, to rising interest rates – causing many to feel the squeeze. Thirty-nine percent of Americans are living paycheck to paycheck and don't see an end in sight. This is particularly acute for Millennials (49%) and Americans with a household income below $50,000 per year (55%).

Economic conditions will drive Americans' financial behavior in the second half of 2023:

Nearly two-thirds (62% total) of already employed Americans said they are either considering a side gig in the next six months (47%) or currently planning on looking for a second job in the next six months (31%).
31% of Americans said if the freeze lifted on student loan payments (which it did, unfortunately), they'd have to cut down on their spending in the second half of the year.
47% of Americans with an annual income above $150,000 plan to diversify their money across more institutions for fear of another financial collapse (compared to 18% of those with a household income below $50,000).

Furthering the divide: Where Americans on the other side of the aisle fall
There is a select group of Americans with the luxury to be proactive about their finances. Nearly one quarter of Americans (24%) think the current state of the economy will impact their finances positively, and one in three (34%) Boomers aren't concerned at all about their personal finances right now. Looking to the future, 41% have cash that they have been holding onto and hope to invest in the next year or so. This number jumps up to 49% for homeowners, and to 60% for those with a household income exceeding $150,000.

Homeowners are making moves – upgrades, long-term rentals – but new home purchases are on hold
Homeowners are navigating a unique situation: 71% of mortgage borrowers have an interest rate below 4%, and are not incentivized to consider selling and buying a new home with a significantly higher rate of 6% or 7%. This "lock-in effect" is leading half (55%) of homeowners to plan to invest in upgrades to their current home rather than sell or purchase a nicer home. One-third (35%) say they plan to make at least one of their real estate investments a long-term rental – though this decision differs greatly by generation. More than half (52%) of Millennial homeowners would make one of their real estate investments a long-term rental, but only 5% of Boomer homeowners say the same. For those looking to expand their real estate portfolio, 68% of current homeowners and 62% of renters would consider purchasing real estate if mortgage rates were to drop.

Methodology: Quicken conducted this research using an online survey distributed by Survey Monkey among n=1,002 U.S. adults from the PureSpectrum consumer network. The sample was equally split between gender, with a spread of age groups and geographies represented. Data was collected from June 20, 2023 to June 22, 2023.

About Quicken Inc.
Quicken is the best-selling personal finance software in the U.S. For 40 years, more than 20 million customers have relied on Quicken to help them take control of their finances. Quicken's award-winning suite of personal finance software and apps — including Quicken Starter Edition, Quicken Deluxe, Quicken Premier, Quicken Home & Business, and Simplifi by Quicken — cater to different financial needs and device preferences. Simplifi by Quicken, named the "best budgeting app" by The New York Times Wirecutter, was added to the Quicken product suite in 2020. Simplifi, a web and mobile app, is designed to help a new generation of digital natives easily stay on top of their finances.

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