Nearly one in two Americans is concerned about making on-time credit card payments, an IBD/TIPP Poll of 1,358 Americans nationwide completed early this month showed. 49% expressed concern about making timely credit card payments.
The online survey was conducted from February 1 to 3.
The survey’s credibility interval (CI) is +/- 2.8 percentage points, meaning the study is accurate to within ± 2.8 percentage points, 19 times out of 20, had all Americans been surveyed.
The survey asked respondents, “As a result of the current economic conditions, how concerned are you about the following? Making on-time credit card payments?” The results read as follows:
- 25% were very concerned,
- 24% were somewhat concerned,
- 17% were not very concerned,
- 17% were not at all concerned, and
- 2% were not sure,
- 15% not applicable
Since November 2022, we have been tracking this metric each month. Notice the remarkable stability in the data.
Credit cards often get a bad rap for facilitating the “buy now, pay later” consumer culture. But, the reality is that most households are using credit cards to pay for necessities such as gas, groceries, and utility bills. The high prices of everyday items force many Americans to use credit to make ends meet.
Under The Hood
The chart below shows concern by age, gender, race, income, and area of residence.
Notice the following.
- Concerns run high among the 25-44 age group and Hispanics. Also, the intensity of concern, i.e., those “very concerned,” is high at 36% for the two groups.
- The share of worried increases with income.
- Those in the age group of 65+ are among the least worried.
- More men (55%) are worried than women (45%).
- Most urban residents (60%) are worried compared to suburbanites (42%) and rural residents (48%).
The Underlying Dynamic
Simply put, Americans cannot make ends meet since their income is not keeping up with the increase in expenses.
Only 27% say that their income has kept pace with inflation. This statistic hovered in the low twenties for most of the last year. The positive change here may denote the start of a new trend, but it is too early to tell.
Real wages are wages adjusted for inflation compared to nominal or unadjusted wages. Despite the positive change, real average weekly earnings year-over-year have declined for 21 consecutive months.
As a result of the imbalance, Americans are also unable to save. The personal saving rate is near an all-time low at 3.4%.
Americans who cannot meet expenses are dipping into their savings or using credit cards. The plastic money is used to pay for unexpected expenses such as car repairs or emergency medical care.
Credit card debt is at an all-time high, touching $1 trillion. A recent Bankrate survey showed that 46 percent of cardholders carry credit-card balances from month to month, up from 39 percent a year ago. According to a NerdWallet study, an American household’s average credit card debt is $7,486, up 29% from a year earlier.
Adding to the pain is credit card interest rates which are also increasing, touching 20%.
Consumer spending is likely to soften in the coming months, a catalyst for recession.
While some economists paint a rosy picture, the reality is far different.
The credibility of most of the nation’s leading economists is low as their political alignment often drives their thinking.
Contrary to the optimism projected by economists, most Americans (53%) believe the economy is in a recession, and another 56% think the economy is not improving. Even though we have not posted two consecutive quarters of negative growth, Americans can feel the sluggishness as measured in our data. Corporate America is also proactively downsizing in anticipation of sluggish consumer spending.
Americans’ credit card worries are real; painting a rosy picture of the economy will not create a dent in their debt.
TIPP Takes
Geopolitics And Geoeconomics
#1. U.S. To Welcome Any Effort By India To End Hostilities In Ukraine: White House – PTI
India has not yet condemned the Russian invasion of Ukraine and has maintained that the crisis must be resolved through diplomacy and dialogue.
The remarks by National Security Council Coordinator for Strategic Communications John Kirby came on Friday, days after National Security Advisor Ajit Doval held talks with Russian leaders, including President Vladimir Putin.
#2. Poland Says It Won’t Go It Alone On Question Of Fighter Jets For Ukraine – RFE/RL
Polish President Andrzej Duda has ruled out the possibility of his country delivering fighter jets to Ukraine without first agreeing on the move with allies. The question divides backers of Kyiv.
Such a decision would have to be taken jointly by NATO allies, Duda told the BBC, days before he is due to visit London.
Duda said his country’s air force has fewer than 50 U.S.-made F-16 aircraft, which he says is not enough for Poland.
#3. Moldovan Gov’t Quits Amid Economic Turmoil, Tension With Russia – Al-Jazeera
Moldova’s president named former minister Dorin Recean as prime minister-designate after Natalia Gavrilita’s resignation.
Moldova’s pro-Western government has resigned after a turbulent 18 months in power marked by economic turmoil and the spillover effects of Russia’s war in neighboring Ukraine.
Russia, which has troops in Moldova’s breakaway region of Transdniestria, has bristled at the possibility of former Soviet republics joining the EU. On Thursday, Moldova’s intelligence service confirmed allegations by Ukrainian President Volodymyr Zelenskyy that Russia has acted to destabilize Moldova.
#4. Wagner Mercenaries Chief Admits Russia Facing Bakhmut Resistance – Al-Jazeera
Yevgeny Prigozhin has admitted that Russian troops are engaged in a fierce fight to take the Ukrainian city of Bakhmut.
In a rare interview with a Russian military correspondent, Prigozhin said Russia had to establish clear goals in its war on Ukraine, namely to firmly establish its presence in eastern Ukraine or push forward to capture more of the country. The complete capture of Bakhmut was key to those plans, he said.
#5. ‘You Simply Misspoke’: Vladimir Putin Scolds Official For Saying Russia Not Best Country – WION
In a video shared on social media, Russian President Vladimir Putin is seen sternly scolding an official for implying that Russia isn’t the world’s best country during a recent meeting.
Head of the Kremlin’s Agency for Strategic Initiatives (ASI), Robert Urazov, claimed that other countries were “the best in the world.”
Responding to this, Vladimir Putin said, “As you were speaking just now, you said this phrase: ‘In other countries, the best in the world. And you went on. So the best country in the world is Russia. I hope you simply misspoke.”
#6. Pregnant Russian Women Flying To Argentina For Citizenship, Officials Say – BBC
More than 5,000 pregnant Russian women have entered Argentina in recent months, including 33 on a single flight on Thursday.
According to the national migration agency, the latest arrivals were all in the final weeks of pregnancy.
It is believed that women want to ensure their babies are born in Argentina to obtain Argentinian citizenship.
The number of arrivals has increased recently, which local media suggests is a result of the war in Ukraine.
#7. China Mulls Tripling Nuclear Warheads To 900 By 2035: Sources – Kyodo
China is considering tripling its stockpile of nuclear warheads to 900 by 2035, as tensions with the United States are expected to escalate further over Taiwan, sources close to the matter said Saturday.
The Chinese sources said that the blueprint, mapped out by the People’s Liberation Army, has already been approved by President Xi Jinping, head of the military, who has been eager to bolster Beijing’s deterrence against Washington.
#8. Chinese Navy Vessel Enters Japan Waters Near Kagoshima Pref. Islands – Kyodo
On Sunday, a Chinese navy survey vessel entered Japan’s territorial waters near islands close to the prefecture of Kagoshima, the latest confirmed sighting of Chinese ships in the area since December.
The Defense ministry said a survey ship crossed into Japanese waters from southwest of Yakushima Island in the prefecture at around 2:30 a.m., marking the seventh entry by a Chinese survey vessel into waters off Kagoshima since November 2021.
#9. ‘Death To The Islamic Republic’: Hackers Take Over Raisi’s Revolution Anniversary Speech – WION
For almost a minute, the hackers interrupted his live televised speech on the internet as a logo of the anti-government hackers displayed on the screen, who goes by the name of “Edalate Ali (Justice of Ali).”
In that one minute, a voice shouted in the background, “Death to the Islamic Republic.”
On Saturday, the Islamic Republic marked the Iranian revolution’s 44th anniversary with state-organized rallies, as President Ebrahim Raisi’s televised speech was briefly interrupted by anti-government hackers.
Raisi, whom young protesters are calling to step down, asked the “deceived youth” to repent so that Iran’s supreme leader can pardon them.
#10. Almost A Million March In France In Protest At Government Pension Reform Plans – AP
Over 960,000 people marched in Paris, Nice, Marseille, Toulouse, Nantes, and other cities.
Protesters hoped to keep up the pressure on the government to back down, and further action is planned for Feb. 16.
The protests are a crucial test both for Macron and his opponents. The government has insisted it’s determined to push through Macron’s election pledge to reform France’s generous pension system. Of the 38 member nations of the Organization for Economic Co-operation and Development, France is among the countries that spend the most years in retirement.
#11. Turkey Earthquake Failures Leave Erdogan Looking Vulnerable – BBC
Turkey’s devastating earthquake has raised questions about whether such a large-scale tragedy could have been avoided and whether President Erdogan’s government could have done more to save lives.
With elections on the horizon, his future is on the line after 20 years in power, and his pleas for national unity have gone unheeded.
Recep Tayyip Erdogan has admitted shortcomings in the response, but he appeared to blame fate on a visit to one disaster.
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Republished with permission from TIPP Insights
