Credit Card Confidence Index: March 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 slow start to 2023

Credit cardholders continue to struggle with confidence in March, even as inflation worries wane.

Key findings

• Short-term confidence is flat in March: 61% of cardholders say they’re confident they can pay their credit card’s monthly statement balance in full this month, unchanged from February. It’s the third straight month without an increase in short-term confidence. However, the percentage of those saying they’re not confident dipped to the lowest since December.
• Long-term confidence falls: 43% of cardholders say they expect to pay their cards’ monthly statement balances in full in at least five of the next six months, down 4 percentage points from February. This continues a recent run of volatility in long-term confidence in which there hasn’t been consecutive up or down months since August.
• Inflation worries continue to fall: 41% of all non-confident cardholders say inflation has made it harder for them to pay their bills. That’s down 4 percentage points from February and 11 points from its peak in January. It’s the lowest total since October.

The bottom line: Expect April to show better results

March wasn’t a great month for credit cardholder confidence. Short-term confidence was largely unchanged and long-term confidence dipped, even as inflation concerns continued to wane. I expect April will be better.

Short-term confidence has grown in three of the past four Aprils, growing by at least 3 points each time. (The only exception was 2020, when short-term confidence was unchanged.) Plus, the only time we’ve seen more than three consecutive months without a bump in short-term confidence was in 2019. September 2019 was the last of five consecutive down months, when short-term confidence fell to a record-low 53% — a record matched only in June 2022.

Also, April means tax returns. Those are a big deal for families’ budgets and make people feel far more comfortable in where they stand.

One of the best things you can do in times of uncertainty — or, honestly, any other time — is shrink your high-interest debt and grow your emergency savings. 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 2,044 U.S. consumers ages 18 to 77 from March 7 to 8, 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.