Many Credit Cardholders Are Seeking (and Often Getting) Payment Relief

Many Credit Cardholders Are Seeking (and Often Getting) Payment Relief

4 in 5 who asked for help have received it in some form, survey finds
A woman reviews her bills

With the pandemic dealing a heavy economic blow to the country, many consumers are struggling to pay their bills and are looking to their creditors for help.

Nearly one-fourth (23%) of consumers earning $100,000 a year or less have asked their credit card issuers for help getting through the financial crisis, according to a new survey from nonprofit debt-management agency American Consumer Credit Counseling (ACCC).

And while a majority of those seeking help have found their requests met with sympathetic ears, some have been forced to consider other options.

Consumers losing confidence

The new findings come from the most recent ACCC Financial Health Index, a periodic look at how consumers are faring economically. In September, just 22% of respondents said they were “very confident” that their income would be secure six months in the future. That number was down from June, when 26% of respondents reported being “very confident” about the coming six months.

At the same time, nearly 10% of respondents in the September survey said they were “not confident at all” about the security of their income over the half year ahead.

As a result, some consumers have sought help from their creditors. Of those who asked for relief from their credit card issuers, the largest percentage (40%) received a payment deferral, allowing them to delay a payment for a given period of time.

Other outcomes included:

  • 23% who were allowed to make a lower payment than normal
  • 16% who received a reduced interest rate

On the other hand, 1 in 5 (20%) of those who sought help had their request denied. For those who have not been able to secure relief, the pandemic may have long-term financial consequences on their credit scores, particularly if they miss payments or incur more debt.

Employment concerns continue

Among the key drivers of financial worries during the pandemic is concern over job stability. The ACCC survey found that a quarter of respondents (25.2%) described their current employment situation as “somewhat” or “very” unstable.

In contrast, 39% said their employment situation was “somewhat” stable and 35.8% called it “very” stable.

Other recent data on this subject have shown that some groups are more worried about keeping their jobs than others. For example, a separate survey from June showed Latinos and those who live in urban areas were more likely to fear employment loss.

A bright spot in the ACCC survey showed consumers were feeling slightly more hopeful overall about the general direction of the economy. In June, 23% of respondents to ACCC’s Financial Health Index said they were not confident at all in the U.S. economy, but that proportion fell to 16% in the September survey. Likewise, 1 in 5 respondents in September (21%) said they were “very confident” in the economy.

Still, the overall picture shows many consumers still struggling. A separate October study from bill payment service provider Doxo found that 42% of consumers have skipped a payment for one or more bills since the start of the pandemic.

Specifically, the Doxo data showed…

  • 27% have missed one or more car payments
  • 26% have missed one or more utility payments
  • 25% have missed one or more cable or internet bills
  • 20% have missed one or more rent payments
  • 19% have missed one or more mobile phone payments
  • 17% have missed one or more mortgage payments

Methodology: ACCC surveyed 441 consumers between the ages of 25 and 65 who have annual incomes of $100,000 or less. The survey was conducted in September.

The Doxo study was based on user surveys and studies of aggregate, anonymized bill payment data from actual bill payment activity to confirmed service providers. The data was drawn from more than 4 million paying customers in the U.S.

Tamara E. Holmes

Tamara E. Holmes is a Washington, DC-based writer who covers personal finance, entrepreneurship and careers.