Study: 29% of Consumers Usually Revolve Credit Card Balances

Paycheck-to-paycheck consumers are three times as likely to revolve credit card debt and carry higher monthly balances, according to the April 2022 edition of “New Reality Check: The Paycheck-To-Paycheck Report,” a PYMNTS and LendingClub collaboration.

More here: Paycheck-to-Paycheck Consumers 3x as Likely to Take On Credit Card Debt

Consumers who never pay their credit balances in full also tend to hold more credit cards than average, according to PYMNTS research, which also finds that 29% of credit card holders “always” or “usually” revolve their balances.

Among cardholders living paycheck to paycheck who responded to our survey, 34% of those without issues paying monthly bills and 47% of those who struggle to pay their bills “always” or “usually” have a revolving balance.

Among those living paycheck to paycheck and not struggling to pay bills, 47% say they “never” or “rarely” have a revolving balance bills, meaning they pay off their balances every month, compared to 40% of those who do struggle.

On top of that, 13% of paycheck-to-paycheck consumers with issues paying monthly bills and 19% of those without issues said they occasionally revolve their credit. So-called “struggling consumers” also tend to nearly hit the average credit card spending limit of $4,700 with an average balance of $3,800.

Paycheck-to-paycheck consumers who pay their bills with no issues report an average spending of $3,100 and a limit of $6,500. Consumers who don’t live paycheck to paycheck report an average spending of $2,100 and a $9,000 limit.

The Credit Edition of PYMNTS’ “New Reality Check: The Paycheck-To-Paycheck Report,” examines the growing shares of U.S. consumers in all economic brackets living paycheck to paycheck and the impact on their ability to access credit and other expense management tools.

Our series draws on insights from a survey of 2,326 U.S. consumers conducted from March 9 to March 11, along with other economic data.

PYMNTS data shows that the average credit card holders has approximately two credit cards, but that number rises to three among those not likely to pay their credit card balances in full or those who “always” or “usually” have a revolving balance.

Our data also finds that the average sum of monthly balances over the last six months for those who always revolve balances on their credit cards is triple the average of those who pay off their balances every month.

Among the other key findings in the April 2022 edition of “New Reality Check: The Paycheck-To-Paycheck Report” are that almost half (49%) of consumers earning more than $100,000 per year reported living paycheck to paycheck in March 2022, a slight decrease from 50% in February.

The share of those earning between $50,000 and $100,000 who reported living paycheck to paycheck also dropped to 63% in March from 65% in February, while the share of those earning less than $50,000 who live paycheck to paycheck jumped to 82% from 80% in the previous month.

For a more in-depth look at credit card usage among consumers living paycheck to paycheck, download the New Reality Check: The Paycheck-To-Paycheck Report: The Credit Edition here.