Credit Card Confidence Stays Steady in August

Credit card confidence stayed steady in August, going unchanged for the first time in more than a year, 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.

Here’s what you need to know about this month’s data.

Key findings

• Credit card confidence was unchanged in August. 61% of cardholders say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month. It’s the first time since November 2023 that we haven’t seen a change of at least three points in either direction and the first month with no change since April 2023. More than 1 in 5 cardholders (23%) say they aren’t confident.
• Slightly 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, up four points from July. Meanwhile, 68% of male cardholders express confidence, down four points from July, helping shrink the gender confidence gap to its lowest level since April 2024.
• Gen Z cardholders (barely) show the highest cardholder confidence, while Gen Xers still show the lowest. 66% of Gen Zers express confidence in being able to pay their credit cards’ monthly statement balances in full this month, compared with 65% of millennials, 61% of baby boomers and 52% of Gen Xers. Millennials are the only age group that saw an increase, rising two percentage points.

Confidence stays steady

Frankly, cardholder confidence has been all over the place since late 2023:

• December 2023: Down seven points
• January 2024: Up nine points
• February 2024: Up four points
• March 2024: Down five points
• April 2024: Up seven points
• May 2024: Down six points
• June 2024: Up four points
• July 2024: Down three points

August is different, however, as confidence levels are unchanged for the first time since April 2023. As in July, more than 6 in 10 cardholders (61%) say they’re confident in their ability to pay their credit cards’ monthly statement balances in full this month. That, combined with the small dip in July, could signal that this volatility is nearing an end, though it’s far from clear whether this calm patch is a blip or the start of a trend.

Looking just at 2024 numbers, the year has been more positive for cardholder confidence than previous years. 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, 2024’s monthly average is 62% confident, a significant jump from 2023 and equal to 2022.

Women’s confidence ticks higher, shrinking gender gap

Just over half of cardholding women (54%) express confidence, while 29% say they aren’t confident. That 54% is up four points from July.

More women have expressed confidence in 2024 than in 2023. So far in 2024, an average of 55% of women have said they were confident, versus just 52% in 2023.

What hasn’t changed, however, is that there’s a massive gender gap. In the index’s nearly six-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 August 2024, that gap is 14 points, down eight points from July and the smallest since April 2024.

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

Gen Z cardholders show the highest confidence, while Gen Xers show the lowest

The gap among age groups is generally less pronounced than the one between men and women. In August 2024, Gen Zers (ages 18 to 27) and millennials (ages 28 to 43) are the most confident in their ability to pay their monthly statement balances in full, at 66% and 65%, respectively. Baby boomers (ages 60 to 78) are close behind at 61%, while Gen Xers (ages 44 to 59) bring up the rear at 52%.

Gen X has consistently been the least likely to express confidence. The last month in which they weren’t the least confident age group was August 2022. That month, 62% of Gen Xers expressed confidence, while just 60% of millennials did the same. Prior to that, it hadn’t happened since April 2021.

Volatility likely to return, fueled by uncertainty over election, Fed cuts

Though confidence stayed steady in August, I think a return to the volatility of the last few months is likely. The complete unpredictability around the election is the primary reason for that, but other X factors are in play.

Many observers expect the Federal Reserve to lower interest rates in September for the first time since the start of the pandemic. In October, barring an extension by the government, late payments on student loan repayments will once again be reported to credit bureaus. That likely means that many Americans will prioritize student loan payments for the first time in years, forcing them to shuffle their budgets to make due.  Add in the uncertainty around the job market, and there’s a lot of reason to think that the second half of 2024 will continue to be chaotic.

One of the best things cardholders can do — whether they feel good or wobbly about their finances — 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. A June 2024 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 6.5 points. That can turn a 30.00% card into a 23.50% card or a 24.00% card into a 17.50% card. It’s absolutely worth the call.

Find your perfect card in 30 seconds. Check your approval odds so you can shop smarter.

Methodology

LendingTree commissioned QuestionPro to conduct an online survey of 2,050 U.S. credit cardholders ages 18 to 78 from Aug. 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 — author of “Ask Questions, Save Money, Make More: How to Take Control of Your Financial Life” — about the latest Confidence Index numbers? Email him at [email protected]. You can also reach out via X at @bymattschulz or Instagram at @bymattschulz.