SAN MATEO, Calif. — More than half of consumers say it would take them longer than six months to repay all their short-term unsecured debts, while a similar percentage are carrying credit card balances to cover essential living expenses, according to a new survey from Achieve.
The June survey of 2,000 consumers, conducted by the Achieve Center for Consumer Insights, found 56% said they would need more than six months to repay short-term debts such as credit cards, buy now, pay later loans, personal loans and medical debt.
The survey also found 55% of consumers are carrying credit card balances to pay for rising essential expenses, up from 53% in Achieve’s second-quarter survey.
Moreover, 27% said they have been carrying credit card balances for essential expenses for more than six months, compared with 25% in the previous quarter.
“Short-term debts often start off as a temporary stop-gap solution to household budget gaps,” Achieve Co-Founder and Co-CEO Brad Stroh said. “With elevated costs of living and compounding interest charges, these debts can quickly create sustained pressure on household balance sheets and budgets.”
How Consumers View Their Debt
Among other findings, Achieve reported:
- 52% said they are comfortable using a credit card for essential expenses without immediately paying off the balance, while 48% said they are uncomfortable doing so.
- 29% said they have either “a bit more” or “far more” debt than they can manage.
- 53% described their debt as manageable, while 18% reported having no debt.
- 33% said their total debt declined during the previous three months, down from 38% in the prior survey.
- 22% said their debt increased, unchanged from the second quarter, while 45% reported no change, up from 40%.
- 54% rated their current financial situation as “poor” or “fair,” while 35% described it as “good” and 11% as “excellent.”
“Consumers commonly narrowly focus on whether they can make the next payment, but the total cost, liability drag and length of the repayment period matters too,” Stroh said. “Carrying the burden of debt for essential expenses can limit the room households retain to absorb additional unexpected costs or make meaningful progress on other financial priorities.”
Most Are Paying Bills, But Many Are Struggling
Despite concerns about debt levels, relatively few respondents reported missing significant numbers of payments.
Achieve found 88% said they were able to pay all or nearly all their monthly obligations during the previous three months. Another 7% said most bills were paid on time, while 5% said their households could pay only “some” or “very few” bills on time.
But 34% said it had been “difficult” or “very difficult” to keep their debt payments current during the previous three months.
Additional Findings
Among consumers who had difficulty paying monthly bills on time:
- 66% said their household income was insufficient to cover spending.
- 31% said they owed money on too many different accounts.
- 22% cited difficulty aligning their paydays with debt-payment due dates
Financial Pressure Reaches Basic Needs, Healthcare
About half of respondents who fell short of meeting their existing financial obligations said they resorted to at least one financial stopgap, according to Achieve.
Among those consumers:
- 50% reduced spending on basic needs.
- 32% took on additional credit card debt.
- 28% borrowed from family or friends.
- 25% tapped short-term savings.
- 19% delayed or skipped medical treatment.
- 18% missed at least one debt payment.
- 11% skipped or reduced doses of prescribed medications.
“Many consumers are keeping up with bills, but that does not mean the debt is becoming easier to manage,” Stroh said. “That payment pressure quickly reaches core household needs and can even impact healthcare choices.”
