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Credit Card Confidence Hits Highest Mark Since 2021

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Credit card confidence spiked to its highest level in more than two years, 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.

April’s seven-point increase continues an unusually volatile stretch for the index. In the past five months, we’ve seen jumps of nine, seven and four points and decreases of seven and five points.

Here’s what you need to know.

  • Credit card confidence jumps to the highest level since October 2021. 66% of cardholders say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month. That’s a seven-point increase from last month and the highest mark in two-and-a-half years. Just 22% say they aren’t confident — the lowest number since December 2022.
  • More than 6 in 10 cardholding women today say they’re confident in paying their credit cards’ monthly statement balances in full this month. 61% of female cardholders express confidence, up seven points from March to tie the highest since December 2022.
  • For the second straight month, millennial cardholders show the highest cardholder confidence, while Gen Xers still show the lowest. 71% of millennials express confidence in being able to pay their credit cards’ monthly statement balances in full this month — their highest total in three years — compared with 69% of Gen Zers, 66% of baby boomers and 56% of Gen Xers. Still, every age group saw at least a four-point bump in confidence, led by Gen Z’s 10-point rise.

Cardholder confidence has, frankly, been all over the place the past five months:

  • April 2024: Up seven points
  • March 2024: Down five points
  • February 2024: Up four points
  • January 2024: Up nine points
  • December 2023: Down seven points

None of those increases or decreases is an individual record. However, taken together, they represent the most volatile stretch since the index began in 2018. We had never seen five months in which every monthly movement was at least four points. (The closest we’d seen was the six months from November 2018 to April 2019 in which every month saw jumps or dips of three points or more.)

While we’re in a period of great ups and downs, April is, without question, a high note. Two-thirds of cardholders (66%) say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month, while 22% say they aren’t confident and 12% say they’re neither. That’s the highest confidence percentage we’ve seen since October 2021.

Looking just at 2024 numbers, the year has been largely positive for cardholder confidence, despite the big dip in March. 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

While those yearly average declines aren’t huge, their consistency is noteworthy. After all, multiple years of small decreases add to a larger one, and that’s what we saw through the end of 2023. However, there’s reason to believe those declines might be a thing of the past. Despite the volatility of the past few months, 2024’s monthly average is 62% confident, a significant jump from 2023 and equal to 2022.

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.

More than 6 in 10 cardholding women (61%) express confidence, while 27% say they aren’t confident. That 61% is up seven points from March and 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 December continues to look like a one-month anomaly rather than the beginning of a new normal. In April, the percentage of cardholding women expressing confidence rose, while those saying they aren’t confident fell by four points. This month, 27% of women with credit cards say they aren’t confident, down from 31% in March, 32% in February and January, 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 10 points, down from 12 in March and the lowest since March 2023. It’s still significant, however.

The average gap since the start of the index is 14 points.

The gap among age groups is generally less pronounced than the one between men and women. In April 2024, millennials (ages 28 to 43) and Gen Zers (ages 18 to 27) are the most confident in their ability to pay their monthly statement balances in full, at 71% and 69%, respectively. Baby boomers (ages 60 to 78) are close behind at 66%, while Gen Xers (ages 44 to 59) bring up the rear at 56%.

We don’t have age group breakdowns for the entire history of the index, but dating back to March 2021, this is just the second time millennials have been the most confident, with March 2024 being the other. They’ve been the least confident twice, in August 2022 and October 2021, but never the most confident until these past two months. Meanwhile, Gen Xers have been the least confident in 35 of the past 36 months, including October 2021, when they were tied with millennials.

The roller coaster of the past few months may roll on for another month or two. 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: The ups and downs of the past few months. We also saw a seven-point drop in June 2023, followed by a six-point rise in July 2023.) Given that, I’d expect to see a decline in May — maybe even another substantial one.

This volatility must end at some point, however. Looking ahead, I think the slow downward trend of recent years is likely to return. There’s reason to be hopeful that 2024 will be better for those with card debt than recent years since inflation appears to have peaked and interest rates are likely to start falling at some point this year. However, things are anything but easy for Americans right now, even as many continue to pause their student loan repayments knowing that late payments won’t be reported to credit bureaus until October 2024. The headwinds facing credit cardholders are real and significant, and many Americans’ financial margin for error is tiny. Something like a job loss, medical emergency or another significant unexpected expense could push them over the edge from feeling good about their financial situation to feeling pretty darn shaky.

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.

LendingTree commissioned QuestionPro to conduct an online survey of 2,025 U.S. credit cardholders ages 18 to 78 from April 1 to 4, 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

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.

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