July 5, 2022
Paving the Payments Future
58% of Americans are living paycheck to paycheck after inflation spike — including 30% of those earning $250,000 or more

  • With inflation still near 40-year highs, more than half of all Americans are living paycheck to paycheck, according to one report.
  • Consumers who are struggling to afford their day-to-day lifestyle tend to rely more on credit cards and carry higher monthly balances making them financially vulnerable.
  • Even top earners say they are stretched thin, the report found.

With inflation at 40-year highs, workers across all income levels are having a harder time making ends meet.

As of May, 58% of Americans — roughly 150 million adults — live paycheck to paycheck, according to a new LendingClub report. That’s down slightly from 61% who reported living paycheck to paycheck in April but up from 54% in May 2021.

Even top earners say they are stretched thin, the report found. Of those earning $250,000 or more, 30% are living paycheck to paycheck. (Another recent survey, from consulting firm Willis Towers Watson, estimated 36% of those earning $100,000 or more are living paycheck to paycheck.)

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Digital tech is turning the unbanked into the banked

More people have accounts than ever. Here’s what we need to do next.

In the worst days of COVID-19, when people around the world were out of work and struggling to pay for food and housing, many national governments came to the same conclusion about the best way to offer immediate help: send people cash. More than 200 countries introduced emergency cash transfer programs or expanded existing ones; India, for example, transferred money to 300 million people, 200 million of whom were women, in the weeks after its first lockdown. Brazil reached 70 million people with emergency transfers.

Imagine the risk involved in making these payments with paper money during a pandemic. Government workers would have to physically deliver these payments, potentially exposing them and everyone they encountered to the virus. In addition, the whole process would be expensive and time-consuming at a time when people need help as quickly as possible.

Cities Where Americans Pay the Lowest Rent

Rents in the United States hit a record high in April, according to real estate listing site, with rents rising 16.7% compared to the previous year alone. In contrast, over the previous five years, gross rents increased by 18.1%. Rising housing costs have put a serious squeeze on the millions of Americans, typically younger ones, who already can’not afford to own a home. Many of those who are already being affected by inflation are likely to look to live in cities with more affordable rentals.

To determine the metros with the lowest rent, 24/7 Wall St. reviewed five-year estimates of median gross rent from the U.S. Census Bureau’s 2020 American Community Survey. The median gross rent across the United States is $1,096, and in these 50 metropolitan areas, it ranges from $765 to as low as $635. Of the 50 metro areas on this list, West Virginia has the most, with six, followed by Alabama and Ohio, with five each. Just over half of these metropolitan areas are in the South.

CFPB Report Highlights Experiences of Military Families with Medical Billing, Credit Reporting, and Debt Collection: CFPB

Servicemembers and veterans report problems with coercive credit reporting and false medical bill collections

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) released its annual report on the top financial concerns facing servicemembers, veterans, and military families, based on the complaints they submitted to the CFPB. Servicemembers told the CFPB about billing inaccuracies and that debt collectors used aggressive tactics to recover allegedly unpaid medical bills. Servicemembers also reported failures by credit reporting companies in helping to resolve inaccuracies and other credit reporting issues.

“Errors on credit reports can jeopardize servicemembers’ financial readiness, and ultimately, their ability to protect our nation,” said CFPB Director Rohit Chopra. “No servicemember, veteran, or military family should be subject to credit reporting rumors and innuendo, nor should they feel coerced to pay a bill they do not owe.”

In an Uncertain Economy, Financial Literacy Training Is Fast Becoming a Hot Perk

Businesses are expanding the notion of employee wellness to include financial health.

Twenty-three years after founding her own company, Amy Power still remembered the feeling of living paycheck to paycheck. The CEO of The Power Group, a Dallas-based public relations and crisis management firm, Power wanted to ensure that her employees did not make the same financial mistakes that she did in her 20s. Her 14 employees, most of whom are Millennials or Gen-Zers, needed to know how to manage their salaries for the long term, so Power offered them something she wished she'd had at their age: access to a personal financial manager.

"It takes some stress off the employee," says Power, whose company made Inc.'s 2022 Best Workplaces list. "If they're worried day to day about making ends meet, how are they going to really be focused when they need to be?"

Americans are navigating a tricky financial moment, facing the highest consumer prices in 40 years, investment portfolios battered by a fresh bear market, and increasing odds of a recession in the next year. More than 60 percent of Americans lived paycheck to paycheck in April, up 9 percent year over year, according to research from PYMNTS, an industry publication and data provider. A third of people earning annual salaries of $250,000 or more reported having little to nothing left in their bank account at the end of the month.

CFPB publishes Beginner’s Guide to Accessing and Using Home Mortgage Disclosure Act Data: CFPB
Data available through the Home Mortgage Disclosure Act (HMDA) provides the most comprehensive source of publicly available information on the U.S. mortgage market. Under HMDA, financial institutions maintain, report, and publicly disclose loan-level information about mortgage applications and loans. HMDA data can help show whether lenders are serving the housing needs of their communities, give diverse stakeholders information that helps to guide policy, and shed light on lending patterns that could potentially be discriminatory, including through redlining or unjustified disparities in lending outcomes that can drive racial and economic inequality.

For more than four decades, public release of HMDA data has made the mortgage market more transparent, competitive, and fair. HMDA data are collected, processed, and published by the CFPB on behalf of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Department of Housing and Urban Development. The agencies made the data available to the public in a wide variety of data products, including via an online HMDA Data Browser and a new HMDA Maps tool.

Credit Card Debt on the Rise as Americans Continue Spending Despite Rising Inflation

Consumer credit card debt rose once again in April 2022, according to the latest Consumer Credit Report released by the U.S. Federal Reserve. Revolving credit card debt rose from $1,023.6 billion in March 2022 to $1,040.7 billion in April. It has been steadily increasing since the first quarter of 2021, when it had dropped to $911.1 billion, the report showed.

Non-revolving credit, including car and school loans, also rose. In all, borrowing climbed 10.1% in April on an annualized basis. Total credit rose $38.1 billion from March, according to the Fed’s figures.

In spite of inflation, consumers continue buying. And, as the report indicated, they are buying on credit. Some of the credit card use is an indication of the growth of digital payment options and online shopping. The report doesn’t show whether debt is being paid off at the end of the month, or not.

However, according to Bloomberg, savings rates have dropped to their lowest levels since 2008, which could indicate Americans are using their credit cards to get by and purchasing essentials in the face of inflation. The New York Fed reported that 537 million new credit card accounts were opened in the first quarter of 2022.

Inflation brings more business to local pawn shops

PANAMA CITY, Fla. (WMBB) — From the gas pump to the grocery store, it’s hard to escape astronomical prices.

Most Americans are beginning to worry about paying their bills and local pawn shops are reporting an increase in business as people look for ways to make some extra cash.

Alamo Auto Sales and Pawn Shop owner, Eric Cleveland, said pawn shops all over the county, including his own, are seeing an increase in business due to inflation.

“People are needing money for gas and food and just to survive we’re seeing a pretty good uptick about 20 percent up from last year on just loans you know people needing to borrow some money,” Cleveland said.

Cleveland said they’ve seen a huge increase in gold, which he said is a sign that times are tough.

“It’s tough whenever people are talking about this is my grandmother’s ring or this is my dad’s ring and they’re just needing 25, 30 maybe 100 dollars our average loan is 100 dollars to get through the month, put gas in the tank to get to work,” Cleveland said.

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