Three-quarters of respondents to a Forbes Advisor survey reported having trouble making credit card repayments on time at least once in the last two years of the pandemic.
A new survey for Forbes Advisor by OnePoll asked Americans about their credit card habits, frustrations and preferences. While some behaviours remained unchanged since the beginning of the pandemic, three-quarters of respondents reported having trouble with on-time payments at least once in the last two years.
Cardmembers still rely on cards for many of the same reasons as always: building credit, earning rewards and having access to easy financing. However, the effects of the pandemic on credit can’t be ignored.
Here’s how American attitudes and behaviours towards credit cards are leaning today.
The pandemic caused cardholders to miss payments
Households’ personal finances were understandably stretched during the toils of the pandemic, with three-quarters of respondents admitting to making a late credit card payment during this time; or missing a payment entirely.
While some payment issues were due to forgetfulness, others were the result of a more direct financial strain. Forty-three per cent of respondents missed or paid late due to needing that money for essentials, while another 27 per cent couldn’t pay due to unexpected expenses.
Card benefits who?
According to the findings of the survey, a mere 29 per cent of cardholders strongly agree that they fully understand the benefits associated with their payment card.
Credit cards often tout their included benefits online, but many of the smaller or lesser-known benefits change frequently. Typical benefits include travel and purchase protection, and cell phone insurance.
Card benefits can be worth a substantial amount of money, especially on premium cards, so it’s worth the effort to track this information down. In some cases, you may even find some unusual extras offered for no additional cost.
Despite interest rate frustration, American card dependence remains
Forty per cent of cardholders are dissatisfied by interest rates, often 15 per cent and 25 per cent annually, according to the survey, making it the top source of frustration when it comes to credit cards.
For cardholders who don’t carry a balance, interest rates don’t make a difference at all. However, these customers are in the minority. Nearly 90 per cent of survey respondents carry a balance occasionally or more often, with 41 per cent carrying a balance every month.
Almost everyone prefers travel rewards to cashback
Despite the fact that travel still comes with challenges and restrictions, most cardholders still prefer to earn travel rewards in some form or another. Hotel points are the most popular reward type, chosen by 28 per cent of respondents, followed by transferable travel rewards (23 per cent), airline miles (21 per cent) and general travel rewards (seven per cent).
Altogether, 79 per cent of respondents chose some sort of travel reward.
Gender disparities in redeeming rewards
The survey found that 79 per cent of male respondents redeem rewards at least once every six months. Sixty-one per cent of women, on the other hand, redeem rewards every six months to a year.
There are lots of reasons to redeem rewards at different rates. Someone saving for a higher-priced reward will naturally need longer to accrue enough points, while someone who prefers multiple, smaller-priced awards can redeem more frequently.
Earning rates matter too, with cardholders hitting their different thresholds at different points of time either due to spending more or earning at a higher multiplier.
The bottom line
This survey touched on a number of different aspects and attitudes toward credit cards, highlighting rea-time cardholder behaviour.
Though this research covered a broad range of topics, it solidified that many cardholders rely on credit cards as a source of financing, especially in times of need or hardship.
It also confirmed that rewards are a strong driver for choosing a specific card and that travel – while adjusted to today’s realities – is still a clear winner.
