Consumer Confidence Appears to Increase Among Other Signs of Normalcy After Financially Turbulent Year
ACCC Financial Health Index finds half of consumers are
starting to make more purchases using credit cards
(Boston, MA) – July 29, 2021 – Buying on credit is making a comeback as U.S. consumers are feeling more confident in their financial position and the overall economy, new data from the American Consumer Credit Counseling Q2 2021 Financial Health Index suggests.
Over the last 16 months, consumers have experienced a financially turbulent year filled with ups and downs.
The ACCC Financial Health Index for the second quarter of 2021 found that 47 percent of respondents are somewhat confident in their income security and continued employment, an increase from March, when only 42 percent of respondents were somewhat confident.
The poll also found that half of consumers have been using more credit in the last month to make purchases. But those who are relying more on credit may find it harder to reduce their debt in the coming months. CreditCards.com found that due to COVID-19 restrictions easing, four in 10 U.S. adults are now willing to treat themselves and accrue debt from automotive spending, home renovations and travel.
“As consumers start to use more credit, it is important they pay close attention to their debt-to-income ratio,” said Allen Amadin, President and CEO of American Consumer Credit Counseling. “It is important that consumers try to focus on eliminating debt rather than increasing it by paying attention to their spending.”
ACCC’s Q2 Financial Health Index poll surveyed 413 respondents aged 25-65 with incomes of $100,000 or less. It was conducted in June.
The poll showed that Americans are just starting to trust the country’s economy. In the March 2020 Financial Health Index, 13 percent of respondents said they were very confident about the U.S.’s economy, and 31 percent said they were somewhat confident. Only 10 percent of respondents said they are very confident, while 40 percent are somewhat confident in this most recent poll.
The U.S. economy added 850,000 jobs in June, half of which were in hospitality and leisure, including restaurants and bars. However, the economy is still down more than two million jobs since before the pandemic.
“Since March 2021, we have continued to see consumer confidence improve,” said Katie Ross, Executive Vice President of American Consumer Credit Counseling. “Consumers are becoming more confident in their ability to reduce their debt and employment stability that has almost doubled since March 2020.”
In the Q1 survey conducted in March 2021, 30 percent of respondents were very confident they could reduce their debt by 10 percent over the next six months. In this quarter’s poll 34 percent are very confident and 25 percent of respondents describe their debt-to-income ratio as very healthy.
About American Consumer Credit Counseling
American Consumer Credit Counseling (ACCC) is a nonprofit credit counseling 501(c)(3) organization dedicated to empowering consumers to achieve financial management through credit counseling, debt management, bankruptcy counseling, housing counseling, student loan counseling, and financial education concerning debt solutions. To help consumers reach their goal of debt relief, ACCC provides a range of free consumer personal finance resources on a variety of topics including budgeting, credit and debt management, student loan assistance, youth and money, homeownership, identity theft, senior living, and retirement. Consumers can use ACCC’s worksheets, videos, calculators, and blog articles to make the best possible decisions regarding their financial future. ACCC holds an A+ rating with the Better Business Bureau and is a member of the National Foundation for Credit Counseling® (NFCC®). For more information or to access free financial education resources, log on to ConsumerCredit.com or visit http://www.consumercredit.com/financial-education.aspx