Credit Card Confidence Index Dips for First Time in 2024
Credit card confidence in March fell for the first time since December, according to the latest LendingTree Credit Card Confidence Index.
Every month since September 2018, LendingTree has asked a nationally representative sample of credit cardholders the following: “Think about all of your credit cards. On a scale of 1 to 5 (5 being very confident, 1 being not at all confident), how confident are you that you can pay the entire monthly statement balance on all of those cards in full this month?” Those who responded with 4s and 5s were called confident, while those who responded with 1s or 2s were deemed not confident.
March’s decline is a reversal of a decidedly positive start to 2024. Cardholder confidence rose a total of 13 percentage points between January (nine points) and February (four points) to push confidence levels to their highest peak since December 2022 before dipping by five points in March.
Here’s what you need to know.
Key findings
- Credit card confidence shrinks for the first time in 2024. 59% of cardholders say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month. That’s a five-point drop from last month and the lowest confidence level since December.
- More than half of cardholding women today say they’re confident in paying their credit cards’ monthly statement balances in full this month. 54% of female cardholders express confidence, down four points from February. Still, even with this month’s decline, confidence for women cardholders is up 14 percentage points from December 2023.
- For the first time in at least three years, millennial cardholders showed the highest cardholder confidence, while Gen Xers still showed the lowest. 63% of millennials express confidence in being able to pay their credit cards’ monthly statement balances in full this month, compared with 62% of baby boomers, 59% of Gen Zers and 52% of Gen Xers. We’ve been breaking down these numbers by age group since March 2021; this is the first month millennials have been the most confident. Also, they were the only age group whose confidence didn’t fall in March.
Confidence dips for first time in 2024
After an unambiguously positive first two months of 2024, credit cardholder confidence took a step back in March.
About 6 in 10 cardholders (59%) say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month, while 27% say they aren’t confident and 13% say they’re neither.
Even with March’s decrease, 2024 has been a largely positive year for cardholder confidence. That marks a major deviation from a trend that began after confidence peaked at 74% in October 2020. Consider the monthly averages for each of the past several years:
- 2020: 67% confident
- 2021: 66% confident
- 2022: 62% confident
- 2023: 59% confident
Those are significant decreases. While those yearly average declines aren’t huge, their consistency is noteworthy. After all, multiple years of small decreases eventually add up to a larger one, and that’s what we saw through the end of 2023. However, despite March’s decrease, there’s reason to believe that those declines might be a thing of the past.
Either way, confidence levels today remain relatively high, even after the declines in recent years. In March, far more people expressed confidence (59%) than said they weren’t confident (27%), though perhaps it may be a bit less impressive with added context. Remember: About 1 in 4 credit cards never get used in a given quarter, according to American Bankers Association data. It’s pretty easy to pay your statement balance off when there’s not one.
Then, you have a significant number of cardholders who use their cards only sparingly, putting a few dollars a month on them. Those folks are probably pretty confident in paying off their statement balances, too.
If you removed the credit cardholders from those two scenarios — leaving only those who use credit cards more frequently — that confidence level would likely be well lower.
Women’s credit card confidence dips
More than half of cardholding women (54%) express confidence, while 31% say they aren’t confident. That 54% is down four points from February but far higher than where things stood at the end of 2023, which had been the first time in the five-plus-year history of the index that more women weren’t confident than were confident. There had only been two other times where that came close to happening — confident women topped nonconfident women by just five percentage points in June 2023 and June 2022.
The good news is that, for now, December looks like a one-month anomaly rather than the beginning of a new normal. In March, the percentage of cardholding women expressing confidence fell by four points, but those saying they aren’t confident fell, too. This month, 31% of women with credit cards say they aren’t confident, down from 32% in January and February and a sky-high 45% in December.
What hasn’t changed, however, is that there’s a massive gender gap. In the index’s five-plus-year history, there’s never been a month in which women have been more confident about their credit card bills than men. In fact, there have only been eight months in which the gender confidence gap fell to single digits, but none since July 2021. (The gap was seven points that month, equaling the record low set in April 2021.)
In March 2024, that gap is 12 points, down from 13 in February and well below December’s record of 24, but still significant.
The average gap since the start of the index is about 14 points.
Millennial cardholders show the highest confidence, while Gen Xers show the lowest
Generally, the gap among age groups is less pronounced than the one between men and women. In March 2024, millennials (ages 28 to 43) and baby boomers (ages 60 to 78) are the most confident in their ability to pay their monthly statement balances in full, at 63% and 62%, respectively. Gen Zers (ages 18 to 27) are close behind at 59%, while Gen Xers (ages 44 to 59) bring up the rear at 52%.
We don’t have age group breakdowns for the entire history of the index, but dating back to March 2021, this is the first time that millennials have been the most confident. They’ve been the least confident twice, in August 2022 and October 2021, but never the most confident (until now). Meanwhile, Gen Xers have been the least confident in 34 of the last 35 months, including October 2021, when they were tied with millennials.
A brief rebound likely, but 2024 outlook remains unclear
Don’t expect another significant drop in confidence next month. In the five-plus years of the index, noteworthy increases and decreases have typically been followed by a reversal of direction the following month. (Case in point: A seven-point dip in December 2023 was followed by a nine-point jump in January 2024. We also saw a seven-point drop in June 2023 followed by a six-point rise in July 2023.) Plus, as more Americans wrap up paying their holiday debt and receive their tax refunds, their financial margin for error might just expand a little bit, leaving them a bit more confident about paying their credit card bills.
One of the best things cardholders can do — whether they feel good about their finances or wobbly — is knock down their credit card debt. If you don’t, sky-high APRs mean it’ll only continue to grow.
The good news is you have options. A 0% balance transfer card might be your best weapon against high interest rates, though a personal loan can help, too. And don’t forget that you might be able to lower your interest rate with a phone call. An April 2023 LendingTree survey found that 76% of cardholders who asked for a lower interest rate on their credit card in the past year got one, with an average rate reduction of six points. That can turn a 30% card into a 24% card or a 24% card into an 18% card. It’s absolutely worth the call.
Methodology
LendingTree commissioned QuestionPro to conduct an online survey of 2,026 U.S. credit cardholders ages 18 to 78 from March 1 to 5, 2024. The survey was administered using a nonprobability-based sample, and quotas were used to ensure the sample base represented the overall population. Researchers reviewed all responses for quality control.
We defined generations as the following ages in 2024:
- Generation Z: 18 to 27
- Millennial: 28 to 43
- Generation X: 44 to 59
- Baby boomer: 60 to 78
Media inquiries about the Credit Card Confidence Index
Want to talk to Matt about the latest Confidence Index numbers? Email him at [email protected]. You can also reach out via X at @bymattschulz or Instagram at @bymattschulz.