1/3 of Consumers Earning a Quarter of a Million Dollars are ...

The fact that a third of them are living paycheck to paycheck should surprise you," said Anuj Nayar, LendingClub's Financial Health Officer. PressRelease 1/3ofConsumersEarningaQuarterofaMillionDollarsareLivingPaychecktoPaycheck 06/01/2022 DownloadthePDFversion PDFFormat(opensinnewwindow) SANFRANCISCO,June1,2022/PRNewswire/--LendingClubCorporation (NYSE:LC),theparentcompanyofLendingClubBank,America'sleadingdigitalmarketplacebank,todayreleasedfindingsfromits10theditionoftheRealityCheck:Paycheck-To-Paycheckresearchseries,conductedinpartnershipwithPYMNTS.com.Forthefirsttimeinthereportseries,theHighEarnersEditionexaminesthefinanciallifestyleofthegrowingshareofhighest-incomeU.S.consumerswholivepaychecktopaycheck,andtheimpactontheirabilitytoaccesscreditandotherexpensemanagement. KeyTakeaway:One-thirdofconsumersearning$250,000ormoreannuallycurrentlylivepaychecktopaycheck. "Earningaquarterofamilliondollarsayearismorethan5xthenationalmedianandisclearlyhighincome.Thefactthatathirdofthemarelivingpaychecktopaycheckshouldsurpriseyou,"saidAnujNayar,LendingClub'sFinancialHealthOfficer."Thesehigh-incomeearnershaveanaverageFICOscoreof758.Theyarecreditworthybuttheyhavehigherfinancialobligationsandaremorelikelytoleveragetheircapitaltofinancetheirlives." Paycheck-to-paycheckconsumersfallintotwocategories:thosewhocanpaytheirbillseasilyandthosewhocannot.InApril2022,61%ofU.S.consumerswerelivingpaychecktopaycheck.Thirty-sixpercentofconsumersearning$100,000to$150,000,31%earning$150,000to$200,000,26%earning$200,000to$250,000and24%earningmorethan$250,000werelivingpaychecktopaycheckwithoutissuespayingtheirbills.Inaddition,between10%and12%ofconsumersinthesehigherincomebracketswerelivingpaychecktopaycheckwithissuespayingtheirbillsinApril2022, while19%ofmiddle-incomeconsumers(thoseearning$50,000to$100,000)and36%oflower-incomeconsumers(thoseearninglessthan$50,000)werelivingpaychecktopaycheckwithissuespayingtheirbills. Usingcredittomanagecashflow Creditproductsareacashflowmanagementtoolforpaycheck-to-paycheckconsumers,especiallythoseinhigherincomebrackets.Creditcardownershipremainshighwith81%ofU.S.adultsofallfinanciallifestylessayingtheyhaveatleastonecreditcard.Thissharegrowsasannualincomeincreases,with95%ofconsumerswhoearnmorethan$250,000ayearreportingtheyholdatleastonecreditcard.Forthoseearningmorethan$250,000,48%havetwoorthreecreditcardstotheirnames.PYMNTS'researchalsofindsthatconsumerswhoearnmorethan$250,000ayeararemorelikelytoengagewithcreditcardsandpersonalloansthanconsumerswhoearnlessthan$50,000.Actualutilizationofcreditcards,basedoncreditcardpayments,rangesfrom47%amonglower-incomeconsumersto73%amongthehighest-incomeconsumers;implyingthatmanyconsumersdonotusetheircreditcards,especiallyamonglowerincomebrackets.Personalloanusagerangesfrom9%to14%. Livingpaychecktopaycheck:Revolvingcredittrends  Paycheck-to-paycheckconsumerstendtocarryhighermonthlycreditcardbalances,independentofincome. Thosethatearnmorearemostlikelytofullypayofftheirbalanceeachmonth,however. TheaverageU.S.consumeruses40%oftheiravailablecreditcardlimitmonthly,accordingtotheresearch.Thisusageishigherthanthe30%oftenrecommendedbycreditexpertsforperceivedcreditworthiness.Withanaveragecreditlimitof$7,300,theaverageU.S.consumerspends$2,900permonthacrosstwocreditcards.  Consumersearning$250,000ormoreannuallyaveragecreditcardusageof44%oftheirspendinglimitof$10,500.Thismeansthatthegapbetweencreditlimitsandspendingexpandsto$5,900forthoseinthehighestincomebracket;thegapis$4,400fortheaverageconsumer. Consumerslivingpaychecktopaycheckhavehighermonthlycreditcardbalancesindependentofannualincome.Roughly54%ofpaycheck-to-paycheckconsumers"occasionally"or"alwaysorusually"revolvetheircreditbalances.  "TheongoingeffectsofonceinagenerationinflationareeatingintothediscretionaryspendingofAmericansacrossallincomesandtheyareincreasinglyrelyingoncreditproductstocoverthecashflowgaps,"addedNayar."Ascreditcardinterestratescontinuetorise,considerlookingatyourvariableinterestratecreditcards.ManyofLendingClub's membershavealreadyrefinancedtheirvariableratecreditcardbalanceintoalowercostfixedrateloantobettermanagetheirdebt." Toviewthefullreport,visit:https://www.pymnts.com/study/reality-check-paycheck-to-paycheck-high-income-revolving-credit-card-debt-loans/  Methodology NewRealityCheck:ThePaycheck-To-PaycheckReportisbasedonacensus-balancedsurveyof4,048U.S.consumersconductedfromApril6toApril13.ThePaycheck-To-PaycheckseriesexpandsonexistingdatapublishedbystateagenciessuchastheFederalReserveSystemandtheBureauofLaborStatisticstoprovideadeeplookintotheelementsthatlieatthebackboneoftheAmericanconsumer'sfinancialwellness:income,savings,debtandspendingchoices.OursamplewasbalancedtomatchtheU.S.adultpopulationinasetofkeydemographicvariables:52%ofrespondentsidentifiedasfemales,32%werecollege-educatedand36%declaredincomesofover$100,000peryear. AboutLendingClub  LendingClubCorporation(NYSE:LC)istheparentcompanyofLendingClubBank,NationalAssociation,MemberFDIC.LendingClubBankistheleadingdigitalmarketplacebankintheU.S.,wherememberscanaccessabroadrangeoffinancialproductsandservicesdesignedtohelpthempaylesswhenborrowingandearnmorewhensaving.Basedonmorethan150billioncellsofdataandover$70billioninloans,ourartificialintelligence-drivencreditdecisioningandmachine-learningmodelsareusedacrossthecustomerlifecycletoexpandseamlessaccesstocreditforourmembers,whilegeneratingcompellingrisk-adjustedreturnsforourloaninvestors.Since2007,morethan4millionmembershavejoinedtheClubtohelpreachtheirfinancialgoals.FormoreinformationaboutLendingClub,visithttps://www.lendingclub.com. 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