Seventy-five percent of Americans have missed at least one credit card payment during the two years of the COVID-19 pandemic, according to the results of a survey that were released last week.
Most of the people who missed a credit card payment did so because they needed the money for essentials like food, while 27% missed a payment because of other expenses. This data is particularly insightful given the rise in inflation and gas prices that are likely making ends meet more difficult for consumers today. There are many in the accounts receivable management industry who are wondering if consumers will have to cut back or stop making payments on unpaid debts because they need that money for gas and other essentials, especially as more companies are re-opening their offices and requiring employees to go back to work.
Nearly 90% of respondents say they often carry a balance on their credit cards from one month to the next and 41% said they always never fully pay off their credit card bills in a given month.
The survey also revealed that men are more likely than women to cash in the rewards they earn for using their credit cards. Seventy-nine percent of men redeem their rewards once every six months, while 61% of woman redeem their rewards every six months to a year.
If consumers are forced to stop or cut back on making debt payments because they need more money for everyday expenses, that could accelerate the pace at which new accounts are placed by creditors with collection agencies. Placement volume was expected to begin ramping up toward the end of 2022, but that may happen sooner if consumers are forced to make choices about which bills to pay.
