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BAI and NFCC Research Finds More Than Half of Americans Having More Difficulty Paying Down Debt as COVID-19 Continues
CHICAGO – Nov. 9, 2020 – BAI, a nonprofit independent organization that delivers the financial services industry’s most actionable insights, and the National Foundation for Credit Counseling (NFCC), released a follow-up survey to the May 2020 findings on the impact COVID-19 had on consumer spending and saving habits. This survey was conducted online by The Harris Poll among more than 2,000 U.S. adults. The research tracks key areas of personal finance behavior and attitudes among Americans.
The survey, conducted in September 2020, finds 52% of Americans noting the pandemic has affected their personal finances – more so than in May 2020 (47%). Most commonly, U.S. adults report they have used savings for daily expenses (22%), increased credit card spending (16%), or applied for unemployment benefits (12%).
Even so, nearly half of adults (47%) are extremely or very confident in their ability to meet their future financial obligations. These findings are consistent with the March 2020 survey. Nearly a quarter (23%) reported feeling extremely confident in meeting financial obligations.
“More consumers are facing uncertainty and experiencing pressure in how they manage short term cash flow,” said Debbie Bianucci, president and CEO, BAI. “Since our last survey in May, financial services leaders have responded to changing customer needs in a variety of innovative ways including short-term small-dollar lending, payment deferments, and the suspension of certain fees. These actions have been designed to help consumers effectively meet their short term financial obligations. With more consumers under pressure, strategies such as these will continue to be critical in navigating the impacts of the pandemic.”
As the pandemic continues, more than half of Americans (57%) find some factors make it more difficult to pay down their debt. The most common challenge is the reduction of income (22%), which has increased significantly since both March 2020 (19%) and March 2019 (17%). Other common challenges for consumers to minimize debt include financial emergencies (19%), fees/interest rates (15%), and/or the inability to find room in the budget to increase debt payments (14%).
“Financial services leaders recognize the debt management challenges many of their customers face amid the uncertainty caused by the pandemic,” Karl Dahlgren, managing director, BAI. “Financial services organizations have been committed to supporting consumers with the implementation of a variety of pandemic relief measures including fee reduction or deferral, new debt repayment plans and proactive assistance programs for vulnerable and impacted communities.”
About the Survey
The 2020 Financial Impact of COVID Survey was conducted online within the United States by The Harris Poll on behalf of the National Foundation for Credit Counseling and BAI between September 15 and September 17, 2020 among 2,067 U.S. adults ages 18+. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For answers to questions about survey methodology, including weighting variables, please contact [email protected].
As a nonprofit, independent organization, BAI has delivered the financial services industry’s most actionable insights for more than 95 years, enabling leaders to make smart business decisions every day. We provide in-depth, proprietary research to more than 40 of the top US banks, support more than 2,000 financial services organizations with compliance and professional development training, provide trusted, relevant thought leadership through BAI Banking Strategies reports, podcasts and webinars, and offer specialized events and programs. For more information, visit www.bai.org.
Founded in 1951, the National Foundation for Credit Counseling® (NFCC®) is the nation’s first and largest nonprofit dedicated to improving people’s financial well-being. With nearly 600 member offices serving 50 states and Puerto Rico, our NFCC Certified Credit Counselors are financial advocates, empowering millions of consumers to take charge of their finances through one-on-one financial reviews that address credit card debt, student loans, housing decisions, and overall money management. Make one of the best financial decisions of your life. For expert guidance and advice, call (800) 388-2227 or visit www.nfcc.org today.