Struggling households would postpone paying these loans or bills if necessary, according to survey results
As many know, keeping up with bills and other financial obligations can be a balancing act.
For some households, job losses or reduced working hours during the pandemic made the problem worse – and the situation has not yet improved. According to TransUnion’s latest Consumer Pulse survey from February 26th to March 1st, the proportion of those still in financial difficulties is 38%.
“Within this subgroup, 74% say they would have difficulty paying bills,” said Charlie Wise, director of global research and advisory at TransUnion.
While the proportion of negatively affected households fell from 61% in April last year, according to the TransUnion survey, according to the Ministry of Labor, more than 18 million people received some form of unemployment benefit in mid-February. About 41.5% of them have been unemployed for at least six months.
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The $ 1.9 trillion Covid aid package that President Joe Biden signed last week approves $ 1,400 of stimulus testing for most adults (and their loved ones) and extends unemployment benefits to include the Labor Day. More than a third (39%) of all middle- and low-income consumers plan to use their stimulus checks to pay their bills or loans, according to the TransUnion report.
At the top of the list of payments that weak households would postpone are student loans. 44% of respondents who have this obligation say they would not pay. (The repayment of the federal student loan will be interrupted until September.) Behind this are medical bills (40%) and personal loans (38%).
“This also speaks in favor of willingness to pay,” said Wise. “If I have five bills to pay, which ones do I prioritize?”
For example, he said, the consequence of missing your student loan payment is different from not paying your mortgage or car loan.
“You still have your degree,” said Wise. “That cannot be repossessed.”
Likewise, medical bills are more likely to have a lower priority for payout.
“You can’t come and take back your treatments,” Wise said.