Credit cards remain the most popular and common debt product used by consumers, regardless of age or income level, according to the results of a recently published survey. More than 62% of consumers had made a payment on a credit card in the past 90 days, compared with 27% of consumers who made a payment on auto loans, 16% on a mortgage, and 9% on a Buy Now, Pay Later product.
Personal loans and BNPL products become more popular to individuals who are living paycheck to paycheck with difficulty, according to the survey. Eighteen percent of consumers in that situation had made a payment on a personal loan in the past 90 days, compared with only 6% of individuals who are not living paycheck to paycheck with difficulty.
Rates of credit card usage increased as the amount of household income increased — from 47% among those making less than $50,000 to 73% among those making more than $250,000 annually. Interestingly enough, all forms of credit were used more by people making higher amounts of money than those making less, according to the survey.
For companies in the ARM industry, data like this can be helpful in understanding the financial situations of the individuals from who they are trying to collect. Knowing what types of payments they are making, what types of credit they might have available, and how much is being used can help fill in many of the pieces to a consumer’s financial situation and allow a collector to develop the right kind of talk-off and offer that makes the most sense.
