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Borrowing Habits/Repayment Hierarchy/Payment Behavior: US vs. UKPublished by: Auriemma Consulting Group Published: Nov. 30, 2009 - 16 Pages Table of Contents
AbstractThe 28th U.S. President, Woodrow Wilson, who led the U.S. into World War I, once said “I not only use all the brains that I have, but also all that I can borrow.” From time to time, in order to support a lifestyle and security that is meaningful to us, we borrow assets. In World War I, Wilson “borrowed” from the American people by raising billions in issuing Liberty Bonds.At the turn of the 1920s, the country as a whole also manifested itself as a nation of borrowers. The lending industry became big business as companies used financing practices to grow, speculators borrowed money to prop up corporations, and consumers borrowed to get a brand new General Motors vehicle. Lending helped to facilitate the growth of the U.S. economy where, by the end of the 1920s, 90% of major durable goods were purchased on installment. While only major purchases were made on installment then, today, some consumers rely on borrowing to finance their day-to-day expenses and maintain their lifestyles during a period of economic difficulty. In this issue, we re-examine consumers’ borrowing habits, so that we can get an idea of the current mindset of the borrower. Today, the credit crunch has caused concern that the borrower will change loan preferences and repayment habits. In this report, we look at the way consumers use their borrowed money (including money borrowed from their credit card and other loan types), what they look for as they take out loans, and how they repay them. Data included in this report were gathered using a web survey administered to 430 credit card users in the U.S. during October 2009. We repeated many of the questions that were used in the June 2008 and June 2006 issues of Cardbeat; in this issue, we will focus our comparisons primarily on the survey results from 2008. As a separate topic, we look at how U.S. consumers compare to U.K. consumers in their payment behaviors: percentage of monthly purchases made by different forms of payment, importance of factors in decision to use a certain form of payment, reasons for using a credit card, and satisfaction with various aspects of most frequently used credit card. U.K. data were gathered using a web survey administered to 504 credit card users during September 2009. Get Full Details About This Report >> |
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