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Consumer Attitudes Towards Debt - US - July 2013

Published By :

Mintel

Published Date : Jul 2013

Category :

Banking

No. of Pages : 129 Pages


Many financial services providers, such as credit card issuers and home equity loan providers, have traditionally focused their business models on encouraging consumers to spend money. However, a more appropriate model that meets the goals of consumers in these days of household financial responsibility may be to help consumers find ways to help themselves spend less, save more, and avoid incurring further debts.
TABLE OF CONTENT

Scope and Themes
What you need to know
Data sources
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

Executive Summary
The market
Figure 1: Incidence of debt in households, by type of debt, April 2013
Figure 2: Composition of U.S. consumer debt, Q4 2012
Market drivers
Figure 3: Case Shiller 20-city home price index, 1/1/2000-4/1/2013
The consumer
Figure 4: Goals and behaviors concerning debt, April 2013
Figure 5: Agreement with attitudes toward debt, April 2013
Differences by demographic groups
What we think

Issues in the Market
Millennials are looking for advice and online tools
A secondary target are those aged 55+
Brainstorm for ways to enrich the lives of the “stressed out”

Trend Applications
Trend: Totophobia
What we\'ve seen
Trend: The Nouveau Poor
What we\'ve seen
Mintel Futures: Brand Intervention
What we\'ve seen

Current Economic Environment
Key points
The economy is growing, but slowly
Figure 6: U.S. real gross domestic product, Q1 2000-Q1 2013
Unemployment has improved, but still not optimal
Figure 7: U.S. unemployment and underemployment rates, January 2007-June 2013
Figure 8: U.S. employment to population ratio, January 2003-May 2013
Other economic factors
There is an improvement in consumer mood
Figure 9: Consumer confidence, May 2007-May 2013
Figure 10: Auto and light truck sales, 2000-12
Figure 11: Privately owned residential housing starts, 2000-12
Figure 12: Existing home sales, 2000-12
Figure 13: Median sale price of existing homes, 2000-12

Consumers and Household Debt
Key points
Incomes are back to 1990 levels
Figure 14: Median U.S. household income, 1990-2011
Revolving debt has stabilized
Figure 15: Total consumer credit owned and securitized, 1/1/1943-5/1/2013
Figure 16: U.S. revolving consumer debt, 1/1/1968-5/1/2013
Figure 17: Composition of U.S. debt balances, housing and non-housing debt, Q1 2004-Q4 2012
Figure 18: Composition of non-mortgage debt, Q1 2004-Q1 2013
Figure 19: Percent of balance 90+ days delinquent by loan type, Q1 2003-Q4 2012
Figure 20: Number of consumers with new foreclosures and bankruptcies, Q1 2003-Q4 2012
Total household wealth has recovered, but unevenly

Innovations and Innovators
Key points
Healing the mortgage market
New credit card offers to help homebuyers, seniors
AARP Chase Credit Card
Chase My New Home App
Well Fargo Home Rebate Card
Reward for debit card users
BankAmeriDeals
Debit card cash back offers from Chase
SunTrust’s SkyMiles
E-Central Credit Union $20 grocery card
Disney Debit from Chase
American Express Prepaid Card

Marketing Strategies
Key points
Overview
Prepaid cards
Figure 21: Chase Liquid reloadable prepaid card online ad, 2013
Figure 22: Magic Card from OneWest Bank email ad, 2013
Figure 23: American Express prepaid stored value card email ad, 2013
Debit cards
Figure 24: Citizens Bank debit card direct mail ad, 2013
Figure 25: PNC Purchase Payback online ad, 2013
Figure 26: Visa Debit Card online ad, 2013
Figure 27: Visa Debit Card online ad, 2013
Payday loans
Figure 28: 100DayLoans email ad, 2013
Mortgages and home equity loans
Figure 29: Prospect Mortgage email ad, 2013
Figure 30: Northwest Savings Bank Home Equity Loan direct mail ad, 2013
Educational loans
Figure 31: Sallie Mae Smart Option student loan direct mail ad, 2013

Consumer Optimism about Household Finances
Key points
Fewer state they are worse off than during and after the recession
Figure 32: Attitudes about household financial situation as compared to the year prior, 2007-12
Figure 33: Attitudes about household financial situation as compared to the year prior, by age, November 2012
Optimism is growing about the financial future of households
Figure 34: Level of optimism about household financial situation in next 12 months, overall, 2007-12
Figure 35: Level of optimism about household financial situation in next 12 months, by age, November 2012
Millennials more likely than others to be planning large purchases
Figure 36: Likelihood of purchasing a big-ticket item in the next 30 days, by age, November 2012
Figure 37: Likelihood of purchasing a medium-ticket item in the next 30 days, by age, November 2012

Attitudes toward Finances and Debt
Key points
Figure 38: Attitudes toward personal finances (any agree), by age, November 2012

Types of Consumer Debt—Overall and by Gender
Key points
Three in four households have debt
Figure 39: Incidence of secured and unsecured debt in households, overall, April 2013
Figure 40: Incidence of secured and unsecured debt in households, by gender, April 2013
Secured debt
Figure 41: Types of secured household debt, by gender, April 2013
Figure 42: Amount of household secured debt, by gender, April 2013
Figure 43: Percentage of home mortgage holders with underwater mortgages, by gender, April 2013
Unsecured debt
Figure 44: Types of unsecured household debt, by gender, April 2013
Figure 45: Amount of unsecured household debt, by gender, April 2013
Figure 46: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by gender, April 2013

Attitudes about Debt by Gender
Key points
Attitudes about personal debt situation
Figure 47: Attitudes toward personal debt situation, by gender, April 2013
Figure 48: Intentions for paying off debt, by gender, April 2013
Attitudes about debt in general
Figure 49: Agreement with attitudes toward debt, by gender, April 2013
Figure 50: Attitudes toward savings, by gender, April 2013
Figure 51: Agreement with statements about retirement savings and pensions, by gender, April 2013
Figure 52: Impact of various types of debt on ability to save for retirement, by gender, April 2013
Interest in assistance in reducing debt
Figure 53: Interest in products and services for debt reduction assistance, by gender, April 2013

Types of Consumer Debt by Age
Key points
Those aged 25-44 have the most debt
Figure 54: Incidence of secured and unsecured debt in households, by age, April 2013
Secured debt
Figure 55: Types of secured household debt, by age, April 2013
Figure 56: Amount of household secured debt, by age, April 2013
Figure 57: Percentage of home mortgage holders with underwater mortgages, by age, April 2013
Unsecured debt
Figure 58: Types of unsecured household debt, by age, April 2013
Figure 59: Amount of unsecured household debt, by age, April 2013
Figure 60: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by age, April 2013

Attitudes about Debt by Age
Key points
Figure 61: Attitudes toward personal debt situation, by age, April 2013
Figure 62: Intentions for paying off debt, by age, April 2013
Figure 63: Agreement with attitudes toward debt, by age, April 2013
Savings versus debt
Figure 64: Attitudes toward savings, by age, April 2013
Figure 65: Agreement with statements about retirement savings and pensions, by age, April 2013
Figure 66: Impact of various types of debt on ability to save for retirement, by age, April 2013
Interest in ways to combat debt
Figure 67: Interest in products and services for debt reduction assistance, by age, April 2013

Types of Consumer Debt by Household Income
Key points
The middle income groups are debt strapped
Figure 68: Incidence of secured and unsecured debt in households, by household income, April 2013
Secured debt
Figure 69: Types of secured household debt, by household income, April 2013
Figure 70: Amount of household secured debt, by household income, April 2013
Figure 71: Percentage of home mortgage holders with underwater mortgages, by household income, April 2013
Figure 72: Types of unsecured household debt, by household income, April 2013
Figure 73: Amount of unsecured household debt, by household income, April 2013
Figure 74: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by household income, April 2013

Attitudes about Debt by Household Income
Key points
Middle income groups most stressed out by debt
Figure 75: Attitudes toward personal debt situation, by household income, April 2013
Figure 76: Intentions for paying off debt, by household income, April 2013
Figure 77: Agreement with attitudes toward debt, by household income, April 2013
Savings versus debt
Figure 78: Attitudes toward savings, by household income, April 2013
Figure 79: Agreement with statements about retirement savings and pension, by household income, April 2013
Figure 80: Attitudes toward paying secured debt vs. savings, by household income, April 2013
Interest in ways to combat debt
Figure 81: Interest in products and services for debt reduction assistance, by household income, April 2013

Types of Consumer Debt by Race/Hispanic Origin
Key points
Secured debt
Figure 82: Types of secured household debt, by race/Hispanic origin, April 2013
Figure 83: Amount of household secured debt, by race/Hispanic origin, April 2013
Figure 84: Percentage of home mortgage holders with underwater mortgages, by race/Hispanic origin, April 2013
Unsecured debt
Figure 85: Types of unsecured household debt, by race/Hispanic origin, April 2013
Figure 86: Amount of unsecured household debt, by race/Hispanic origin, April 2013
Figure 87: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by race/Hispanic origin, April 2013

Attitudes About Debt by Race/Hispanic Origin
Key points
Figure 88: Attitudes toward personal debt situation, by race/Hispanic origin, April 2013
Figure 89: Intentions for paying off debt, by race/Hispanic origin, April 2013
Figure 90: Agreement with attitudes toward debt, by race/Hispanic origin, April 2013
Savings versus debt
Figure 91: Attitudes toward savings, by race/Hispanic origin, April 2013
Figure 92: Agreement with statements about retirement savings and pensions, by race/Hispanic origin, April 2013
Figure 93: Impact of various types of debt on ability to save for retirement, by race/Hispanic origin, April 2013
Interest in ways to combat debt
Figure 94: Interest in products and services for debt reduction assistance, by race/Hispanic origin, April 2013

Cluster Analysis
Cluster 1: The Stressed Out
Demographics
Characteristics of this cluster
Opportunity
Cluster 2: Young & Fancy Free
Demographics
Characteristics of this cluster
Opportunity
Cluster 3: Debt Hogs
Demographics
Characteristics of this cluster
Opportunity
Overview
Figure 95: Percentage of target clusters with debt, by type of debt, April 2013
Figure 96: Types of secured household debt, by target clusters, April 2013
Figure 97: Amount of secured household debt, by target clusters, April 2013
Figure 98: Percentage of home mortgage holders with underwater mortgages, by target clusters, April 2013
Unsecured debt
Figure 99: Types of unsecured household debt, by target clusters, April 2013
Figure 100: Amount of unsecured household debt, by target clusters, April 2013
Figure 101: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by target clusters, April 2013
Attitudes about debt
Figure 102: Attitudes toward personal debt situation, by target clusters, April 2013
Figure 103: Intentions for paying off debt, by target clusters, April 2013
Figure 104: Agreement with attitudes toward debt, by target clusters, April 2013
Savings versus debt
Figure 105: Attitudes toward savings, by target clusters, April 2013
Figure 106: Agreement with statements about retirement saving and pensions, by target clusters, April 2013
Figure 107: Attitudes toward paying secured debt vs. savings, by target clusters, April 2013
Figure 108: Attitudes concerning financial situation in retirement, by target clusters, April 2013
Interest in ways to combat debt
Figure 109: Interest in products and services for debt reduction assistance, by target clusters, April 2013
Cluster demographic tables
Figure 110: Target clusters, by demographics, April 2013
Cluster methodology

Appendix – Types of Consumer Debt by Risk Score
Figure 111: Self-reported risk score, by gender, April 2013
Figure 112: Self-reported risk score, by age, April 2013
Figure 113: Self-reported risk score, by gender and age group, April 2013
Figure 114: Self-reported risk score, by household income, April 2013
Figure 115: Self-reported risk score, by race/Hispanic origin, April 2013
Secured debt
Figure 116: Types of secured household debt, by risk score, April 2013
Figure 117: Amount of secured household debt, by risk score, April 2013
Unsecured debt
Figure 118: Types of unsecured household debt, by risk score, April 2013
Figure 119: Amount of unsecured household debt, by risk score, April 2013
Figure 120: Agreement with statements about credit card behavior, credit card holders who revolve a balance, by risk score, April 2013

Appendix – Attitudes about Debt by Risk Score
Figure 121: Attitudes toward personal debt situation, by risk score, April 2013
Attitudes about debt in general
Figure 122: Agreement with attitudes toward debt, by risk score, April 2013
Savings vs. debt
Figure 123: Attitudes toward savings, by risk score, April 2013
Figure 124: Agreement with statements about retirement savings and pensions, by risk score, April 2013

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