We’ve been tracking how the attitudes of financial decision makers in the US are evolving during the COVID-19 pandemic. Our most recent surveys have included questions about bill-paying behaviors during the crisis, and about how respondents plan to use government support funds. We share a few highlights here, and will post again on Banking & Securities Matters when we have new results.
- Nearly 40 percent of US financial decision makers report having skipped or only partially paid a bill over the past month (see Exhibit), and they were most likely to skip or partially pay a credit card bill or auto loan. Rent and mortgage payments were the next most likely bills for nonpayment.
- Young people (from 18 to 34 years old) and those making less than $50,000 were the most likely to miss or partially pay one or more bills.
- Most consumers who have received or expect to receive a support payment from the government say they intend to use it to pay utilities, and the next largest group say they intend to use it to pay their credit card bills (see Exhibit). The smallest number of people report intending to use their support payment on auto loan payments.
We asked household financial decision makers specifically about their payment of seven types of bills:
- Credit cards: 32 percent of consumers skipped or partially paid their credit card, with 7 percent skipping entirely. Rates of non- or partial payment were highest for financial decision makers in the lower income range (44 percent for those in households with less than $25,000 in annual income) and also elevated for younger consumers (45 percent for people 18 to 34). While non-payment rates are lower for older people and higher earners, they are still in double digits for everyone. Roughly 51 percent of consumers say they will use their government support payment to cover credit card bills, though about 30 percent expect to skip or partially pay their credit cards in the coming month.
- Auto loans: Twenty-six percent of consumers skipped or partially paid their auto loan, with 9 percent skipping entirely. Across all age and income segments, nonpayment rates for auto are on the higher end. They are much higher among young people (44 percent) and those earning between $25,000 and $50,000 (31 percent). People over 55 report much higher payment rate—only 7 percent did not pay or partially paid their auto loans.
- Mortgage payments: One-quarter of consumers skipped or partially paid their mortgage, with 9 percent skipping entirely; these rates are similar to consumer non-payment of auto loans. Financial decision makers in the lower income range, and young consumers, had the highest rates of non-payment (36 percent and 47 percent, respectively), while 95 percent of consumers over the age of 55 paid in full.
- Rent: Twenty-two percent of consumers skipped or partially paid their rent, with 7 percent skipping entirely, in rates similar to consumer non-payment of utilities. Young people and consumers earning between $25,000 and $50,000 had the highest non-payment rates (36 percent and 26 percent, respectively) while 82 percent of consumers in the lower income range paid their rent in full, the highest rate of any demographic.
- Utilities: Fifteen percent of consumers skipped or partially paid their utility bill, with 6 percent skipping entirely. While non-payment rates for utilities are similar to those for telecommunications and insurance, about 71 percent of consumers intend to use their government support payment to pay utilities—the highest percentage for any payment type.
- Telecommunications: Fourteen percent of consumers skipped or partially paid their telecommunications bill, with 4 percent skipping entirely. Young people have the highest non-payment rate, at 34 percent.
- Insurance: Seventeen percent of consumers skipped or partially paid their insurance bill, with 6 percent skipping entirely. Young people are the most likely to skip or partially pay, at a rate of 37 percent.
For an expanded set of exhibits on bill payments trends, visit our main US financial decision-maker sentiment page (scroll to bottom for bill payment exhibits).