One of the big unanswered questions about the financial crisis and recovery: Will people hit hard by investment, housing or job losses come out of this thriftier?
Or will they go back to their old free-spending ways?
Recent evidence is intriguing, but mixed.
A poll by the National Foundation of Credit Counselors found 25% of credit card users paying a bigger portion of their balance than they did three months earlier.
Still, only 12% followed the wisest course, paying the entire balance every month. The fact that more are paying more than the minimum required may not be due to a change of heart but to new card regulations that make bigger payments more profitable. Any payments above the minimum now apply to balances with the highest interest rates rather than the lowest.
“These findings show the true impact the past few years have had on Americans and the way they think about money,” Diane Young, the firm’s director of retirement and goal planning, said in a statement.But the firm’s report offered no comparable figures from before the financial crisis, so it’s hard to conclude there has been any change in attitude. And even if there has been, it’s far from certain it won’t change when people have less to worry about.
An analysis by DismalScientist, a publication of Moody’s Economy.com (Stock Quote: MCO) offers the tantalizing conclusion that “consumers are not returning to their old free-spending ways,” but then points out it’s too soon to know if habits have changed for the long term.