2/3 of the U.S. Population Now Lives Paycheck to Paycheck

Key takeaway: · A Deeper Look at Credit Scores · Credit And Living Paycheck to Paycheck · Methodology · About LendingClub · CONTACT: PressRelease 2/3oftheU.S.PopulationNowLivesPaychecktoPaycheck 05/02/2022 DownloadthePDFversion PDFFormat(opensinnewwindow) AsRisingInflationMakesPayingBillsandBuildingSavingsIncreasinglyDifficult, MoreConsumersofAllIncomeBracketsJoinTheirRanks Paycheck-to-PaycheckConsumersareThreeTimesMoreLikelytoRevolveCreditCardDebt andCarryHigherMonthlyBalances SANFRANCISCO,May2,2022/PRNewswire/--LendingClubCorporation (NYSE:LC),theparentcompanyofLendingClubBank,America'sleadingdigitalmarketplacebank,todayreleasedfindingsfromitsnintheditionoftheRealityCheck:Paycheck-To-Paycheckresearchseries,conductedinpartnershipwithPYMNTS.com. TheCreditEditionexaminesthegrowingsharesofU.S.consumersinalleconomicbracketslivingpaychecktopaycheck,andtheimpactontheirabilitytoaccesscreditandotherexpensemanagementtools. Keytakeaway: LivingpaychecktopaycheckhasbecomethedominantwaypeoplemanagetheircashflowintheUnitedStates,withclosetotwo-thirdsoftheU.S.population,64%orabout166millionadults,doingsoinMarch2022. Livingpaychecktopaycheckmeansdevotingallofone'ssalarytoexpenseswithlittletonothingleftoverattheendofthemonth,yetmanyoftheseconsumersremaincreditworthy,activelymanagingtheircashflowsinrealtime.Infact,closetoone-quarterofconsumerslivingpaychecktopaycheckreportacreditscorehigherthantheFICOaverageof750. "Thenumberofpeoplelivingpaychecktopaychecktodayisreminiscentoftheearlydaysofthepandemicandithasbecomethedominantlifestyleacrossincomebrackets,"saidAnujNayar,FinancialHealthOfficeratLendingClub."Asinflationwehavenotseeninagenerationtakesmoreofourpaychecksforeverydayneeds,Americansacrossincomesandcreditscoresareincreasinglyrelyingoncreditproductsjusttogetby. Thatiswhythefinancialservicesindustrymustofferbettertoolstohelpbridgethegap." ADeeperLookatCreditScores PYMNTS'researchfindsthatpaycheck-to-paycheckconsumerswithoutissuespayingtheirbillshaveanaboutaveragecreditscoreof694,whilethosestrugglingtopaybillseachmonthhaveabelowaveragecreditscoreof613.Theaveragecreditscoreforallpaycheck-to-paycheckconsumersis664,morethan90pointsbelowtheaverageforconsumersnotlivingpaychecktopaycheck.Meanwhile,thegapbetweentheaveragecreditscoresoflow-andhigh-incomeconsumersislessthan90points.Consumerswhoearnlessthan$50,000reportabelowaveragecreditscoreof648,whilethoseearningmorethan$100,000reportanaboveaveragecreditscoreof734. Thedataalsofindsthatconsumerswhoarefinanciallystrugglingtendtochecktheircreditscoresmorefrequently.Ofthoseconsumerswholivepaychecktopaycheckwithissuespayingtheirbills,20%checkedtheircreditscoresinthe24hoursbeforePYMNTS'surveycomparedtoonly9%ofconsumerswholivepaychecktopaycheckwithoutissuespayingtheirbills. CreditAndLivingPaychecktoPaycheckThereportcontinuestofindthatcreditcardownershipremainshigh,with63%ofrespondentsofallfinanciallifestylessayingtheyhavemadeacreditcardpaymentinthelast90days. Paycheck-to-paycheckconsumersarethreetimesaslikelytorevolvecreditcarddebtandcarryhighermonthlybalancesoverall.Thoseconsumerswhoneverpaytheircreditbalancesinfullalsotendtoholdmorecreditcardsthanaverage.PYMNTS'researchfindsthat29%ofcreditcardholders"always"or"usually"revolvetheirbalances. Onaverage,creditcardholdershaveapproximatelytwocreditcards,whichrisestothreecreditcardsamongthosenotlikelytopaytheircreditcardinfull(i.e.,thosewho"always"or"usually"havearevolvingbalance).Moreover,thedatafindsthattheaveragesumofmonthlybalancesoverthelastsixmonthsforthosewhoalwaysrevolvebalancesontheircreditcardsistripletheaverageofthosewhoalwayspayinfull. Strugglingconsumersalsotendtonearlysaturatetheaveragecreditcardspendinglimitof$4,700,declaringanaveragebalanceof$3,800.Paycheck-to-paycheckconsumersnotstrugglingtopaytheirbillsreportanaveragespendingof$3,100andalimitof$6,500.Consumersnotlivingpaychecktopaycheckreportanaveragespendingof$2,100anda$9,000limit.Manypaycheck-to-paycheckconsumersremaincreditworthy,maintaingoodcreditscores,andareapttotapintoconsumerloans,creditcardsandotherpaymentoptionssuchaspersonalloanstomanagetheircashflows. "AstheFedlookstocurbinflationbyraisinginterestrates,considerlookingatanycredityouhavewithavariableinterestrate,"continuedNayar."ManyofLendingClub's4millionmembershavealreadyrefinancedtheirvariableinterestratecreditcardbalanceintoalowercostfixedrateloansotheycanresponsiblymanagetheirdebtobligations." Toviewthefullreport,visit:http://www.pymnts.com/study/reality-check-paycheck-to-paycheck-credit-scores-consumer-card-debt-inflation/ MethodologyNewRealityCheck:ThePaycheck-To-PaycheckReportisbasedonacensus-balancedsurveyof2,326U.S.consumersconductedfromMarch9toMarch11.ThePaycheck-To-PaycheckseriesexpandsonexistingdatapublishedbystateagenciessuchastheFederalReserveSystemandtheBureauofLaborStatisticstoprovideadeeplookintotheelementsthatlieatthebackboneoftheAmericanconsumer'sfinancialwellness:income,savings,debtandspendingchoices.OursamplewasbalancedtomatchtheU.S.adultpopulationinasetofkeydemographicvariables:52%ofrespondentsidentifiedasfemales,32%werecollege-educatedand36%declaredincomesofover$100,000peryear. AboutLendingClubLendingClubCorporation(NYSE:LC)istheparentcompanyofLendingClubBank,NationalAssociation,MemberFDIC.LendingClubBankistheleadingdigitalmarketplacebankintheU.S.,wherememberscanaccessabroadrangeoffinancialproductsandservicesdesignedtohelpthempaylesswhenborrowingandearnmorewhensaving.Basedonmorethan150billioncellsofdataandover$70billioninloans,ourartificialintelligence-drivencreditdecisioningandmachine-learningmodelsareusedacrossthecustomerlifecycletoexpandseamlessaccesstocreditforourmembers,whilegeneratingcompellingrisk-adjustedreturnsforourloaninvestors.Since2007,morethan4millionmembershavejoinedtheClubtohelpreachtheirfinancialgoals.FormoreinformationaboutLendingClub,visithttps://www.lendingclub.com. CONTACT: ForInvestors:[email protected] MediaContact:[email protected] PYMNTSContact:[email protected] Vieworiginalcontenttodownloadmultimedia:https://www.prnewswire.com/news-releases/23-of-the-us-population-now-lives-paycheck-to-paycheck-301536811.html SOURCELendingClubCorporation