High Debt Consumers Average 14 Late Payments Per Year

A recent collaboration from PYMNTS Intelligence and Sezzle titled “The Credit Accessibility Series: Economic Malaise Exacerbating U.S. Consumer Debt Levels” found that roughly one-third of consumers struggle to make payments on time, and high debt consumers have an average of 14 late payments each year.

As the U.S. economy has become increasingly dependent on domestic consumption, consumer credit card debt has surpassed the $1 trillion mark for the first time. The report surveyed more than 2,500 consumers in July to determine how levels of debt impact consumers’ credit accessibility, purchasing power, and financial livelihoods.

High-debt consumers make up about one-third of the U.S. population, and they owe at least $250,000 in outstanding debt, which is predominantly made up of mortgage and auto loans. Half of U.S. consumers are considered low debt and owe less than $250,000, and 17 percent of consumers have no outstanding debt.

The report found that 30 percent of high-debt consumers have overdue payments and twice as many missed payments as low-debt consumers. Though high-debt consumers are marginally less likely to make late payments than the average consumer at 33 percent, they are more likely to use overdrafts to cover transactions.

36 percent of consumers that have credit score issues have used a credit-building app in the last 12 months, and 22 percent did not use one but expressed interest in doing so. 46 percent of high-debt consumers with credit score issues used credit-building apps, compared to just 27 percent of consumers with no debt, but have credit score problems.