May 2007 - The Experian-Gallup Personal Credit Index is down, but only by 1 point to 91. The Personal Credit Index stood at 100 at its inception in February 2005. During recent weeks, fears have grown that the housing market recession and sub-prime mortgage market debacle will spread, impacting the markets for prime mortgage loans and, maybe, even consumer credit as a whole. Additionally, the survey revealed how consumers are saving money and using credit.
According to the Experian-Gallup Personal Credit Index survey, sixty-five percent of consumers say they save some money on a regular basis (72% among employed adults). Three in ten (31%) report that it's hard enough just to make ends meet. This sentiment is greater among those who have not attended college. Among those who have not attended college, 42% say they don't save on a regular basis (55% say they do).
One in Every Two Consumers Don't Pay Full Amount of Credit Card Charges
While more than one-third (37%) say they generally pay the full amount of their credit card(s) bill each month, one in every two (49%) report that this is not always the case. Not surprisingly, those who do not save regularly are less likely than their counterparts to report they pay the full amount on their credit cards each month (18% vs. 47%).
Among consumers reporting annual household incomes of $75,000 and more, 48% say they pay their credit card charges in full each month vs. 34% among consumers with household incomes of $40,000 - $74,999 and 28% among those with annual household incomes of less than $40,000.
Women, in general, are less likely than males to say they pay off the full amount each month (34% vs. 41%). More specifically, women under age 50 are less likely than consumers age 50 and over (both male and female) to say they pay the full amount each month (27% among women under age 50 report paying the full amount).
Thirteen percent of all consumers say they usually pay the full amount, but not always. One in four (24%) say they pay as much as they can but usually leave a balance. Eleven percent report that they usually pay the minimum, but not much more. Thirteen percent said they did not have any credit cards.
A Majority of Consumers With Credit Cards Used Them for Holiday Gifts
Those who had credit cards and said they spent money on gifts for the holidays were asked what percentage of the amount they spent on these gifts were purchased with their credit card(s). Among this group, 34% said none, and 19% report it was less than 50%. Still, 45% say they used their credit card(s) for 50% or more of these gifts, including 18% who said they charged 100% of their holiday gifts on their credit cards. Note, that 18% said they had paid off all of the holiday credit purchase, leaving the remaining of these credit card holders with some holiday credit card debt during March.
Three-Quarters of Consumers Feel They Have Enough Money Right Now To Live Comfortably But More Than Half Think Now It is a Bad Time To Spend Money
Seventy-six percent of consumers believe they have enough money right now to live comfortably. About one in four (23%) do not feel they have enough money to live comfortably.
The percentage who feels they have enough money to live comfortably right now is related to education and income. Among those reporting household incomes of $75,000 or more, 91% believe they have enough money to live comfortably vs. 61% among consumers reporting less than $40,000 in annual household income. Similarly among those who have graduated college, 88% feel they have enough money to live comfortably vs. 69% among those with a high school education or less.
When asked if they felt that given their own financial situation they were in a good position to buy some of the things they would like to have or that now is a rather bad time for them to spend money, 54% felt now is a bad time for them to spend money. Forty-two percent said they felt they were in a good position to buy things they would like to have.
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 included more than 3,000 adults, 18 and over, randomly selected from across the country. The survey's margin of error is +/- 2%.