The average American household owes a near-record $8,700 to credit card companies.
Forty-six million Americans, nearly one in five adults, think they will miss at least one credit card Payment due date in 2020, according to a WalletHub credit cards survey released Tuesday. The researchers think this indicates that cracks in the foundation of consumers’ finances are beginning to show, under the strain of mounting debt.
“The reason that roughly 46 million people expect to miss at least one credit card due date in 2020 is that we’re stretched too thin – in terms of both time and money,” said Odysseas Papadimitriou, WalletHub CEO.
U.S. credit card users started 2020 with more than $1 trillion in credit card debt, Papadimitriou said.
“Up until this point, we’ve managed to keep our accounts in good standing at historical rates,” he said.
However, expecting to miss due dates isn’t a good sign, Papadimitriou said. “And not only do 18% of people expect to miss at least one credit card due date in 2020, but 30% [of] us say that not having enough money is the reason we’re most likely to be late.”
The survey’s findings on late credit card payments are:
- Credit card issuers are usually forgiving when you ask the first time. Nearly nine in 10 people who have tried to get a credit card late fee waived were successful. Women are 18 percent more likely to have tried to get a fee waived than men but are also 2 percent less likely to have been successful.
- Payment priorities change with age. People aged 18 to 44 are most worried about missing credit card payments. The 45-59 age group is most concerned about their mortgage, while those over 59 put tax payments as their biggest worry.
- Luxury can lead to lapses. People with high income are almost twice as likely to miss a payment due to forgetfulness as people with low income.
- Men and women react differently to fees. When asked about their attitudes toward getting a late fee, women are 39 percent more likely than men to feel “punished.” Men are twice as likely to feel “indifferent.”
What should credit card users concerned about late payments do?
Papadimitriou recommends setting up automatic monthly bill payments from a checking account for at least the minimum amount due each month.
“This will at least remove forgetfulness as a potential cause,” he said. “Automated payments won’t do much good if you don’t have enough money in your bank account, however. So careful budgeting and saving are key, too.”
Is it worth asking credit card companies to waive late fees?
“Credit card users who almost always pay their monthly bills on time but fail to do so once in a blue moon should definitely try to ask their credit card company to waive any associated late fee,” Papadimitriou said.
Nearly all people who’ve tried in the past say they’ve been successful at least once, he said. “This is actually one reason why credit cards that emphasize ‘no late fees’ as a feature are sometimes overrated. You might get that on other cards, anyway, just by asking. Plus, ‘no late fee’ often actually means no fee the first time you miss a due date.”