CHARLOTTE, N.C., March 10, 2022 /PRNewswire/ -- As we mark
the two-year anniversary of the coronavirus pandemic shut downs,
many Americans are still experiencing its financial and credit
impact — but in very different ways. In a new survey by
LendingTree®, the nation's leading online financial services
marketing, 30% of Americans went into debt while another 30% say
they actually improved their credit score.
Among those who are dealing with debt, nearly half (48%) put the
blame on inflation while 34% cite income loss.
Key findings
- The coronavirus pandemic increased credit card debt for 30%
of Americans, with inflation (48%) and income loss (34%) cited as
the top two debt drivers. Even with the expanded child tax
credits, parents with kids under 18 (40%) were more likely than any
other demographic analyzed to add debt during the pandemic.
- Many consumers experienced difficulty paying bills on time
during the pandemic. More than a quarter of cardholders (28%)
paid their credit card bills late at least once during the
pandemic, with parents of young children (45%), millennials (42%),
those earning less than $35,000 (36%)
and women (33%) facing more late payments than other
consumers.
- Card closures and credit limit cuts were common at the start
of the pandemic, and some card issuers continue to do so. In
the past 6 months, 14% of cardholders say their issuer slashed the
limit on one of their cards, and 13% say their card was closed
involuntarily by the issuer.
- More than 1 in 5 consumers (22%) haven't checked their
credit score at all during the pandemic, while others saw their
scores improve. Though many Americans faced significant
economic challenges, 30% say their credit scores are higher now
than they were at the start of the pandemic.
- Consumers are eyeing credit card rewards more than ever.
About a third (32%) of Americans have applied for a new credit card
during the pandemic, and rewards were the No. 1 reason. Another 14%
changed their primary credit card to maximize rewards, and 21% are
cashing in on credit card rewards more often.
"There was a huge disparity in how Americans were affected by
the pandemic financially, no question about it," says Matt Schulz, chief credit analyst at
LendingTree. "Some folks emerged from the last two years ahead of
the game, while others had their financial worlds absolutely
devastated."
Credit card checkup: 5 steps to take today
No matter which credit pandemic tale you relate to, these key
strategies can help you maintain your credit health.
- Keep tabs on your credit score and credit
report. Knowing where you stand is important so you can
decide if your budget needs some attention. Everyone can access
their free credit report from the three major credit bureaus.
Additionally, LendingTree offers free monthly credit scores, credit
monitoring and customized credit health improvement
recommendations.
- Use technology to your advantage. One of the best
ways to avoid late payments, which can wreck your credit score, is
to set alerts and use your credit account's other tools. "Automatic
payments can make paying late a thing of the past, and they're
typically easy to set up," says Schulz. Just don't get in the habit
of paying only the minimum due, he adds, as that can lead to
long-term debt.
- Analyze spending to see if current cards are providing
value. How you spend can change dramatically over the
years, and what you have in your wallet may not fit your lifestyle
anymore. "Take the time to review what rewards and perks your card
offers, along with what categories you spend the most on and make
sure that they match up. If they don't, it is probably time for a
new card," Schulz adds.
- Get serious about debt payoff. One tool that may
help: Balance transfer cards that offer introductory periods of 0%
or low APRs. "They can make a huge difference for folks with credit
card debt," says Schulz. "Not only can they reduce the amount of
interest you pay and how long it takes to pay off your debt, it can
also streamline your finances."
- Review monthly and annual budgets. "Budgets are living
documents. They need to be reviewed, tweaked and updated regularly
to make sure they're effective," says Schulz. "Life has changed a
lot for many of us in the past two years, so if you haven't checked
your budget recently, now is a great time to do so."
To view the full report,
visit: https://www.lendingtree.com/credit-cards/study/covid-19-and-credit-cards-inflation-debt/.
Methodology
LendingTree commissioned Qualtrics to
conduct an online survey of 1,249 consumers from Feb. 7-10, 2022. The survey was administered
using a nonprobability-based sample, and quotas were used to ensure
the sample base represented the overall population. All responses
were reviewed by researchers for quality control.
About LendingTree
LendingTree is the nation's leading
online marketplace that connects consumers with the choices they
need to be confident in their financial decisions. LendingTree
empowers consumers to shop for financial services the same way they
would shop for airline tickets or hotel stays, comparing multiple
offers from a nationwide network of over 500 partners in one simple
search, and can choose the option that best fits their financial
needs. Services include mortgage loans, mortgage refinances, auto
loans, personal loans, business loans, student loans, insurance,
credit cards and more. Through the LendingTree platform, consumers
receive free credit scores, credit monitoring and recommendations
to improve credit health. LendingTree proactively compares
consumers' credit accounts against offers on our network and
notifies consumers when there is an opportunity to save money. In
short, LendingTree's purpose is to help simplify financial
decisions for life's meaningful moments through choice, education
and support. LendingTree, LLC is a subsidiary of LendingTree, Inc.
For more information, go to www.lendingtree.com, dial 800-555-TREE,
like our Facebook page and/or follow us on Twitter @LendingTree
MEDIA CONTACT:
Morgan
Lanier
morgan@lendingtreenews.com
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SOURCE LendingTree