The coronavirus covering economic numbers. Source: Shutterstock.

|

From work reduction to cuts in pay and job loss, millions ofpeople have been impacted financially in the U.S. by the COVID-19 pandemic in one way or another. So itis not surprising that when it comes to reducing debt, a majorityof Americans are currently finding it harder than ever to pare itdown.

|

In a recent report released by BAI and the National Foundationfor Credit Counseling (NFCC) from a joint Harris Poll on the topicof consumer spending and saving habits in light of COVID-19, thedata showed that more than 55% of Americans have factors that havemade it significantly more difficult to minimize their debt duringthis pandemic. The most common factor per the poll was thereduction of income.

|

Per the study, which polled 2,067 adults in the U.S. between May12 and May 14, the data showed that this number has increasedsignificantly since both March 2020 and March 2019.

|

Other reasons indicated in the survey for the difficulty in debtreduction included unexpected financial emergencies, job lossand/or the inability to find room in the budget to increasepayments.

|

"The challenges related to debt reduction are amplified forthose who have lost their jobs as a result of the pandemic," NFCCPresident/CEO Rebecca Steele said. "Insufficient levels ofemergency savings coupled with prolonged periods of unemploymentmake it more essential for the expansion of long-term debtmanagement solutions provided by nonprofit credit counselingagencies."

|

Although the majority of those surveyed are not reducing debt,they also are not looking to credit cards to meet short-term incomeneeds, according to the survey.

|

The proportion who have applied for a new credit cardin the last three months is only 10%, which issignificantly lower than the 19% who reported having applied for anew credit card in the last 12 months.

|

However, even with all this disruption and stresses on thefinances for many, the survey showed that nearly half of adults –which is about the same proportion as in March 2020 – are stillvery confident in their ability to meet their future financialobligations, with 21% saying they are extremely confident.

|

READ MORE:

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Heather Nevitt

Heather D. Nevitt is the Editor-in-Chief of Corporate Counsel and Global Leaders in Law.