consumer credit

A Return to Higher Household Credit Card Debt and Other Troubling Financial Trends

Americans show increased concerns over long-term finances, and more than one in four not saving for retirement

Washington, DC., April 4, 2017 – As Financial Literacy Month begins, the National Foundation for Credit Counseling® (NFCC®) today released the results of the 2017 Financial Literacy Survey, now in its tenth year.

Sponsored by Washington-based credit union, BECU, the survey found an increase in Americans’ credit card debt, decreases in the number of people with non-retirement savings and higher levels of concern about long-term financial stability, including retirement savings.

“It is concerning that so many Americans remain in such a fragile financial position after the Great Recession,“ said Susan C. Keating, president and CEO of the NFCC. “Credit card debt is on the rise, and people are not saving for a financially healthy future. The NFCC member network provides professional advocates and resources to help people overcome these obstacles, and I encourage everyone to use them in support of their own financial goals.”

Credit Card Debt on The Rise

Compared to last year, significantly more U.S. adults indicate their household carries credit card debt from month to month (39% vs. 35% in 2016), with nearly two in ten adults saying they roll over $2,500 or more in credit card debt each month, up from 2016 (16% vs. 14% in 2016). Interest rate increases related to the recent Federal Reserve announcement will likely add to the cost of carrying credit card debt, which could increase financial pressures on families who are unable to find extra room in their budget to offset the impact of these changes.

Americans Spending Less

Reversing a trend that has been consistent since 2009, more U.S. adults are spending less than they were last year (26% vs. 23% in 2016). As more households carry costly credit card debt from month to month, spending could become a greater challenge as Americans try to pay off balances while working against a rising tide of interest and fees.

Saving and Retirement Pressure

A little over half of adults (54%) say they are saving the same as last year, slightly down by 4 percentage points from 2016. Those who say they are saving “more” remains unchanged since 2016 (26%). The proportion that has non-retirement savings has decreased slightly in the past year (68% vs. 69% in 2016).

Additionally, more than 1 in 4 U.S. adults (27%) do not save any portion of their household’s annual income for retirement, which holds steady compared to 2016 (26%) – continuing the trend of a large percentage of adults not funding this important life event. When asked what areas of personal finance are most worrisome, retiring without having enough money set aside was the top response, up significantly more than the previous two years (18% vs. 15% in both 2016 and 2015).

The financial health of an individual can have large impacts on their community and beyond, both positive and negative, now and in the future.

“The financial health of an individual can have large impacts on their community and beyond, both positive and negative, now and in the future. Ultimately, healthier individuals drive healthier communities long-term,” said Benson Porter, BECU president and CEO. “We continue to look for ways to encourage our members to take control of their finances and long-term savings. For example, early results of our financial health pilot program are promising. One-on-one sessions with BECU experts to promote taking action on saving and budgeting have resulted in increased emergency savings and net worth among participants.”

Student Loan Repayment

Although the percentage who said they would not recommend student loans as a way to finance college education remains the same as last year (11%), the percentage who said their student loan was a good investment has actually increased since 2015 and 2016 (now 9% vs. 6% in 2016 and 2015). A person’s confidence in their ability to repay a student loan is one possible factor in determining if borrowing is a good investment. More options for affordable repayment of student loan debt and the availability of nonprofit student loan counseling services may be among the factors influencing this positive trend. Last January, the NFCC launched the nation’s largest network of comprehensively certified student loan counselors to help those who struggle with repayment.

Seeking Financial Advice

It remains encouraging that a majority of U.S. adults (80%) agree that, considering what they already know about personal finance, they could still benefit from advice and answers to everyday financial questions from a professional. Additionally, if they were having financial problems related to debt, nearly one-quarter of adults, or almost 59 million people, indicated they would reach out to a professional non-profit credit counseling agency for assistance.

Click here to view the 2017 Consumer Financial Literacy Survey.




About the Survey
The 2017 Financial Literacy Survey was conducted online within the United States by Harris Poll on behalf of the National Foundation for Credit Counseling® (NFCC®) and BECU between March 1 and March 13, 2017 among a nationally representative sample of 1,649 adults ages 18+, and oversamples of 315 adults residing in the greater Seattle area, 315 adults living in the greater Spokane area, and 313 adults in the greater Portland area. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. Prior to 2013, this survey was conducted by telephone.
About NFCC
Founded in 1951, the National Foundation for Credit Counseling® (NFCC®) is the nation’s first and largest nonprofit dedicated to improving people’s financial well-being. With nearly 600 member offices serving 50 states and Puerto Rico, our NFCC Certified Credit Counselors are financial advocates, empowering millions of consumers to take charge of their finances through one-on-one financial reviews that address credit card debt, student loans, housing decisions, and overall money management. Make one of the best financial decisions of your life. For expert guidance and advice, call (800) 388-2227 or visit here.
About BECU
BECU is a not-for-profit credit union owned by its members. Members receive the benefits of ownership through better rates and fewer fees. With more than 1 million members and over $16 billion in assets, BECU is the largest credit union in Washington and one of the top five financial cooperatives in the country. BECU currently operates more than 45 locations in Washington and two financial centers in South Carolina. For more information, visit here.
[i] Calculation based on U.S. Census Bureau’s 2016 Current Population Survey (CPS), which estimates there are 244.81 million adults ages 18+ residing in the United States: 244.81M x 0.24 = 58.75M.