September 1, 2006 - Despite an unusually hot summer, a cooling housing market, unrest in the Middle East and the possibility of further interest rate hikes, the Experian-Gallup Personal Credit Index managed to climb 8 points to 92, its second highest level this year. Consumers felt confident about their ability to meet their monthly payments and effectively manage their total debt. However, the survey found that many consumers are feeling the pinch of higher gas prices.

According to the Experian-Gallup Personal Index survey for July 2006, over half of all consumers (51%) say higher gas prices this year have caused them financial hardship. In fact, consumers at virtually every income level have been affected. When asked about the impact of rising gas prices and financial hardship, by household income, the survey revealed:

• 65% of those having incomes under $40,000 a year say they have been affected
• 54% of consumers with incomes between $40,000 and $75,000 say they have been affected
• 32% of those having incomes over $75,000 say they have been affected

Additionally, the survey found consumers reporting cutting back on their personal discretionary spending. Nearly two thirds of consumers (64%) say that as the cost of gas and energy rises, they have personally felt the need to cut back on their personal discretionary spending. According to the survey:

• 75% of those having incomes under $40,000 a year have had to cut back in personal spending
• 68% of those making between $40,000 and $75,000 a year report having to spend less
• 48% of those earning over $75,000 a year say they too, have cut back in personal spending

Growing disparity about gas prices from just a year ago

The survey revealed that 93% of consumers feel the energy situation in this country today is a problem. Nearly 75% say today's higher gas prices compared to those of a year ago are more of a "permanent change" rather than "a temporary fluctuation in price." And 73% of consumers surveyed say the country's energy situation is having a major impact on the economy. Additionally, 49% report cutting back on the amount of money they save each month, while 16% report they have had to increase their monthly credit card balance.

Consumers expect gas prices to rise, yet are divided on solution

The reported median price adults paid for gas this past quarter was $2.90 a gallon. Consumers expect gas prices to continue to rise over the next three months, surpassing $3.00 a gallon, on average. According to the survey, most consumers reported $4.00 a gallon as the financial hardship "breaking point" - defined as "the price per gallon it would become a financial hardship for you."

Consumers are divided as to how to fix the nation's energy problems. Roughly one third (35%) feel the nation should emphasize exploration and production of more oil, gas and coal supplies. Slightly more (44%) believe more emphasis should be placed on conservation measures by consumers.

How Americans are cutting back on their personal spending

As a direct result of higher gas and energy prices, the survey uncovered how Americans are cutting back:

• 65% say they have cut back on their driving
• 57% reported to have cut back on their use of air conditioning and/or heating
• 53% claim to have cut back on their vacation
• 57% say they have cut back on eating out
• 31% say they have had to cut back on their spending for food and other necessities

With record-setting oil prices approaching $80 per barrel, continued financial hardships and further spending cutbacks are almost certain to cripple the average consumer, not to mention the impact on the economy.

About the Experian-Gallup Personal Credit Index

The Experian-Gallup Personal Credit Index is based on a monthly nationwide survey of households and measures four key areas related to credit: level of debt, monthly payment burden, credit rating and debt extension capability. The sampling was conducted in April, May and June 2006, and included more than 3000 adults, 18 and over, randomly selected from across the country. The survey's margin of error is +/- 2%.