Nationwide consumer confidence in borrowing is low
New Filene report measures consumers’ borrowing intentions
MADISON, WI (February 1, 2017) — A new report from the Filene Research Institute, titled “Confidence in Borrowing: Survey 2016,” examines national consumer borrowing intentions to show financial institutions, policymakers, researchers and commentators how intention can match with and predict actual borrowing. Research was collected in September 2016, investigating consumers’ borrowing intentions for the next six months.
The report, researched and written by Hope Jensen Schau, Professor of Marketing, University of Arizona and Ignacio Luri, Doctoral candidate in Marketing, University of Arizona, offers insights on temporal changes in consumers’ borrowing confidence.
“Consumer borrowing is an important macroeconomic measure because it parallels consumer spending and serves as an important measure of consumer confidence and health,” said Schau. “Loan growth is also an important driver of sustainability for credit unions that currently depend on consumer lending and mortgage lending for the majority of their earnings.”
Survey data reveals that national confidence in borrowing is very low, with 93% of the 1,164 U.S. respondents aged 18 and older stating they “do not plan on borrowing” over the next six months. In addition to the report, a video featuring research author Ignacio Luri is available.
Credit unions understand the need to offer members consumer loan products, but may be going about marketing them in the wrong way. More than 80% of respondents claim they are worried about their current debt. This report provides insights regarding consumers’ fear and worries around borrowing, and provides credit unions with up-to- date, research-based insights to inform their marketing and communications strategies.
“Very few people are completely closed to debt, and that is an opportunity for credit unions,” said Luri. “Credit unions should seek to understand more about the reasons for when and how consumers feel confident and try to make borrowing a less stressful topic for their members.”
Stressful consumer debt comes in many forms, but healthcare, credit card, and student loan debt ranked at the top, while mortgage loan, entertainment, and auto loan debt were least likely to produce stress.
To learn more about consumer borrowing and how credit unions can boost customer confidence in borrowing,download our report, “Confidence in Borrowing: Survey 2016.” This report is an output from Filene’s Center for Consumer Decision Making, which uncovers consumer preferences, trends and behaviors in money management. The research is generously sponsored by CUNA Mutual Group.
About Filene Research Institute
Filene Research Institute strengthens organizations through innovative research and incubation to improve consumer financial well-being. As an independent cooperative finance think tank, Filene’s membership network connects a community of leaders and bright minds to change lives through innovation, truth and cooperation. In addition to delivering cutting-edge, actionable academic research, Filene also provides incubators to test and scale solutions, events to spark organizations into action and advisory services to help accelerate and implement innovation. For more information, visit filene.org and @fileneresearch.