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December 1, 2005 — A respite from rising prices at the pump and a renewed sense of optimism as the new year draws near have given the Experian/Gallup Personal Credit Index a much-needed bump. Up 11 points from last month's record low of 74, December's level of 85 represents the index's highest level since August, ending the year on a relative high note.
Refusing to buy into prognostications of another challenging year, the majority of American consumers surveyed have high hopes for 2006.
- 68% say they are optimistic about their financial situation in the upcoming year
- 30% of those in the optimistic category consider themselves "very optimistic"
- Only 14% say they are pessimistic about their situation heading into the new year
When asked how housing and gas prices will fare, consumers seem skeptical but confident.
- 53% expect both to be higher, however…
- Only 16% expect gas prices to be "much higher," with 14% expecting the same of housing
Expanded Employment Expectations
Of those consumers surveyed who are gainfully employed, an impressive 57% look forward to earning a higher salary in 2006, while only 6% expect to see a decline in wages. And money isn't the only thing employees are expecting to see more of-one in five employees (22%) anticipates a promotion during the upcoming year.
Seeking new employment altogether seems to be a higher priority with younger workers; 39% of those surveyed under the age of 30 expect to find a new job next year. Expectations fall with age, with only 14% of those over 30 foreseeing a new gig in their near future.
Fruitful Financial Futures Forecasted
New Year's being the time of year people typically make resolutions, consumers were asked about their plans for the upcoming year. Their answers varied nearly as much as consumers themselves.
- 6% of those with mortgages intend to refinance
- 13% anticipate they will buy a new home
- 20% foresee moving to a new place at least 10 miles away
- 21% see a new car or other vehicle in their near future
- 38% plan on paying off all of their debt
- 50% plan to make home improvements
Debt Declines
There's some good news on the debt front:
- The average credit card debt is now $4072, down 4% from last December's average of $4243
Despite this decline, 26% of consumers are still uncomfortable with their debt level, up 1% from last year's level of 25%.
Learning Leanings
Lastly, nearly one in five consumers (19%) plan to go back to school in 2006, and there seems to be a definite correlation between this decision and one's age. Nearly half (47%) of those who see more education in their future are 30 or younger. Only 4% of those who plan to return to school are 50 or older, suggesting that older consumers are content to continue their education exclusively at the school of hard knocks.
About the Experian-Gallup Personal Credit Index
The Experian-Gallup Personal Credit Index is a monthly survey among a nationally representative sample of 1,000+ respondents, focusing on consumers' ever-changing attitudes and perceptions relating to their current credit situation and future expectations. Specific areas of inquiry include debt load, credit score, borrowing, and repayment ability. The survey's margin of error is +/- 3%.
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Consumers Primed By Falling Pump Prices
Experian-Gallup Personal Credit Index Rises to 85 - Its Highest Point Since August
- Steadily falling gas prices are helping make Americans monthly debt load more manageable.
36% of Americans Plan to Improve Their Credit Score in 2006
% of Americans Who Say Their Credit Score Will Be Better or Worse in 2006:
Almost 2-in-5 Plan to Be Debt-Free in 2006
Financial Expectations for 2006:
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