COVID-19 Changes How People Use Credit Cards, Finds Debt.com Survey
A new survey from consumer website Debt.com finds that one-third of respondents are crystal clear about their credit card intentions: “As soon as the pandemic ends, we’ll run up bills at restaurants and retailers.”
While that might be depressingly predictable to many financial experts, there was a big surprise: Even more people won’t do that.
Of the 1,000 respondents, 42 percent agreed with this statement: “I believe we’ve learned how much interest and fees cost. We’ll permanently cut back.”
Even higher numbers displayed advanced knowledge of credit card usage that didn’t seem to exist before the pandemic.
With Financial Literacy Month approaching, Americans seem to finally be applying the lessons they’ve learned:
The 2019 Debt.com survey found that 49 percent said they “never or rarely hit my credit limits.” That jumps to 57 percent at the height of the pandemic.
There was a 10 percent decrease in the number of people who used credit cards for shopping. Sixty percent versus 70 percent in 2019 – despite the rise of online shopping during the pandemic.
The number of people holding over $20,000 in credit card debt increased by just one percent in 2021 over 2019, while the number of people signing up for new credit decreased by 1.5 percent.
The most significant number to one financial expert was that last one, even though it’s the smallest.
“Opening new credit cards can drag down your credit score and it’s a warning sign,” says Debt.com President Don Silvestri. “In my experience, it’s likely that a person has maxed out their other cards and is seeking more breathing room. Unfortunately, they rarely catch up. Instead, they get trapped with more debt.”
According to Howard Dvorkin, CPA and Debt.com Chairman, “The latest credit card survey shows that Americans are finally taking their credit card spending seriously. While overall debt has ticked up a couple percentage points across the board year over year, the fact that consumers are sticking to a few cards, avoiding hitting their credit limits, and charging less frivolously, are all good signs for a post-pandemic world.”
“I’d never say there’s a silver lining to a pandemic, so I’ll just say I’m hopeful we’ve learned some solid financial lessons,” Silvestri says. “We’ll know for sure when we conduct our credit card survey next year.”
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