More than half of U.S. consumers say it will take longer than six months to pay off their short-term, unsecured debts, a signal that repayment timelines are stretching even as most households stay current on their bills, according to new survey data from Achieve.
The survey found 56% of respondents expect to need more than six months to repay balances on credit cards, buy now, pay later loans, personal loans and medical debt.
The reliance on revolving credit for necessities continues to inch upward. Fifty-five percent of consumers said they carry credit card balances to cover essential expenses, up from 53% in the second quarter, and 27% said they have been carrying those balances for more than six months, up from 25% last quarter. More than half of respondents, 52%, said they are comfortable using a credit card for essentials without paying the balance off right away.
On the surface, payment performance looks solid. Eighty-eight percent of households said they met all or nearly all of their monthly obligations over the past three months, and just 5% said they paid only some or very few bills on time. But the stability comes at a cost. Thirty-four percent of respondents described staying current as difficult or very difficult, and among those struggling, 66% said their household income simply does not cover spending. Another 31% cited owing money across too many accounts, and 22% said their paydays do not align with debt due dates.
The tradeoffs consumers make to stay current should catch the attention of collection professionals watching roll rates and repayment capacity. Roughly half of respondents turned to at least one risky stopgap after falling short, including cutting spending on basic needs (50%), adding credit card debt (32%), borrowing from family and friends (28%) and tapping short-term savings (25%). Nineteen percent delayed or skipped medical treatment, 18% missed a debt payment and 11% skipped or reduced prescribed medication doses.
Sentiment reflects the strain. Fifty-four percent of consumers rated their financial situation as poor or fair, and 29% said they have more debt than is manageable. Achieve Co-Founder and Co-CEO Brad Stroh noted that consumers keeping up with bills does not mean their debt is becoming easier to manage, and that payment pressure is reaching core household needs and healthcare decisions.
