Credit Card Confidence Index: May 2023
How are Americans feeling about their ability to pay off their credit card bills?
That’s what we track every month with the LendingTree Credit Card Confidence Index — our exclusive monthly look at the mindset and payment habits of American credit cardholders.
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How the Credit Card Confidence Index works
Each month, we ask cardholders the following:
- On a scale of 1 (not at all confident) to 5 (very confident), how confident are you that you can pay the monthly statement balance on all your credit cards in full this month?
- How many times have you paid all your monthly statement balances in full in the past six months?
- How often do you expect to do it in the next six months?
On that first question, those who rate their confidence a 4 or 5 are deemed confident, while those who say 1 or 2 are deemed not confident. That’s how we get the short-term confidence percentage. (Example: If we say short-term confidence is at 63%, it means that 63% of cardholders surveyed rated their confidence as a 4 or 5 on that question.)
On the third question, we consider you confident if you say you expect to pay your monthly statement balances in full in at least five of the next six months. That’s how we get our long-term confidence percentage. (Example: If we say that long-term confidence is at 52%, it means that 52% of cardholders surveyed said they expect to pay their monthly statement in full either five or six times in the next six months.)
We also ask those who say they’re not confident in the long term why they feel that way. We present our findings, along with analysis on trends and how they fit in the general context of the economy as a whole, each month in this Credit Card Confidence Index.
The latest: Cardholder confidence continues remarkably stable run to start 2023
Credit cardholders’ short-term confidence remained stable in May, rising a percentage point on the heels of back-to-back-to-back months with no change.
Key findings
- Short-term confidence up slightly in May: 62% of cardholders say they’re confident they can pay their credit card’s monthly statement balance in full this month. That’s up 1 percentage point from April. It ends a run of four straight months without an increase in short-term confidence, though the two most recent months saw no change.
- Long-term confidence steady: 46% of cardholders say they expect to pay their cards’ monthly statement balances in full in at least five of the next six months, unchanged from April.
- About 1 in 3 confident cardholders have enough savings: 32% of confident cardholders say they feel that way in part because they have enough savings to cover any emergency expenses. That figure is down 1 percentage point from April but equals the average rate since we began tracking this data point in October 2022.
The bottom line: Expect a small dip as summer arrives
Credit cardholders have largely been unflappable throughout 2023. Perhaps surprisingly, rising interest rates, persistent inflation, growing debt, headline-grabbing bank failures and other economic news haven’t been enough to shake Americans’ overriding sense of stability when it comes to their credit cards.
What can wreck that feeling of confidence? Summer.
Once the kids are out of school, Americans will head out to highways, airports, amusement parks, ballparks, swimming pools and more to make the most of the summer. With that often comes higher credit card bills. That’s true any year, but with costs for so many things continuing to rise, it seems even more certain this year.
I’m not expecting a 10-point dip, and I’m not expecting the June gloom to last long. One reason for optimism is that among those cardholders who say they’re confident in paying their statement balances in full this month, 32% say they feel that way in part because they’re comfortable with how much savings they have. That figure has been remarkably stable since we began tracking it in October 2022, never rising above 34% or below 30% — a good sign.
Still, if history is any indication, we’ll see some decline in June. What can you do in the meantime? Knock down your high-interest debt and bump up your emergency savings if possible. It can be easier said than done, but 0% balance transfer credit cards, low-interest personal loans and high-yield savings accounts can help get you there.
Methodology
LendingTree commissioned Qualtrics to conduct an online survey of 1,371 U.S. credit cardholders ages 18 to 77 from May 3 to 4, 2023. 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.
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 Twitter at @matthewschulz or Instagram at @matt.schulz.