WalletHub, a personal finance company best known for recommending credit cards based on consumers’ creditworthiness and financial identity, released a survey with disheartening and surprising numbers. The report states that about 16 percent of adults in the United States, that’s 40 million, expect to miss at least credit card payment due date in 2019. The average American household already owes a near-record $8,200 to credit card companies; a balance made even more expensive by recent Federal Reserve rate hikes, and gender and life status play a major part in attitude toward late payments.
“A surprising number of people have stable jobs but fluctuating incomes,” said Laura Wolff, an instructor of economics at Southern Illinois University Edwardsville. “How many hours or tips or commissions they get a pay period may vary, which makes it a struggle sometimes to pay bills. Shocks on the spending side are also hard to manage, and this is going to be especially difficult for lower or moderate income earners to manage than high-income earners.”
Interestingly enough, the WalletHub’s survey revealed that high-income earners may miss a payment but not because of financial hardship but out of forgetfulness – ever heard of autopay? The study looked at consumers’ experiences with late payments and their approach to personal finances.
Key Stats from the survey reveals that gender and status in life play a significant role in payment patterns.
Lenders certainly can be flexible, at least when it comes to late fees. WalletHub’s survey found that 9 in 10 people who’ve asked their credit card company to waive a late fee were successful. Nine in ten people who have tried to get a credit card late fee waived were successful. Women are 17 percent more likely to have tried than men and are also 2 percent more likely to have been successful. Specific demographics succeeded more often than others, though. For example, people over age 59 succeeded 24 percent more often than people aged 18-29.
Men and women react differently to fees. When asked about their attitudes toward getting a late fee, women are more likely than men to feel “irresponsible,” “ashamed” or “punished.” Men are more likely than women to feel “angry” or “indifferent.”
Though credit card payments are significant, they are just one of many bills Americans must keep up with each month. People also balance mortgages, taxes, electricity, auto loans and even luxuries like cable. WalletHub’s survey found that people’s priories for bill payments change as they age. From age 18 up until 44, people worry most about missing credit card payments. From 45 to 59, they are most concerned about their mortgages. Taxes become the biggest worry after age 59.
Although many consumers are conscious that missed credit card payments can be more damaging than missed utility payments, people aren’t always picking and choosing when they miss payments. Sometimes, a missed payment happens purely because of absent-mindedness, and WalletHub’s survey found that is most common among the wealthy. People who earn at least $100,000 per year are twice as likely to miss a payment due to forgetfulness than people who make less than $25,000 per year, survey results show.
“People who have money are less likely to worry about money,” said Katherine L. Jackson, a professor of finance at Truman State University. “Also, most people who make $100,000 or more are older and thus tend to be more forgetful.”
WalletHub’s survey also found that 2.7 times more people worry most about missing a credit card payment rather than an electricity payment this winter.
Lenders and companies recommend that to contact them if you think you’re going to miss a payment due date and many are willing to work out a payment plan with the consumer.
“Missing a credit card payment has greater consequences,” said Lola Neudecker, a professor emeritus of accounting at the University of New Mexico. “I now work for an electric utility company. The last thing we want to do is cut off a customer’s electric service. We have many programs in place and we do not report delinquent accounts to consumer credit scoring agencies.”