Take a Victory Lap! Proof Americans Aren't (That) Bad With Money

by Kailey Hagen | Updated Aug. 11, 2021 - First published on Sept. 22, 2019

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Bird's eye view of two female track runners holding an American flag and waving.

Image source: Getty Images

Americans struggle with money in many ways, but they have gotten a few things right.

You hear about many financial studies that focus on the ways that Americans are bad with money -- the debt they have, the lack of savings, their worries about the future. This information can be useful and may even galvanize some into improving their financial habits, but for many, it just shines a light on a bleak reality they're all too familiar with. 

So how about some good news for a change? The Ascent has conducted several surveys over the last few months that examine different facets of American finances. They've turned up a few key insights that suggest that maybe we aren't quite as terrible with money as all the bad news would have you believe. Here are five of the most interesting things we've found.

1. Most Americans pay all of their bills on time

The Ascent's survey on wasteful spending habits found that the majority of Americans -- even those who say they waste far more money than they should -- are able to pay all of their bills on time each month. Of course, showing a little restraint makes this easier. Among those who said they don't waste much money, 86% were able to pay all of their bills on time compared to just 59% of self-confessed wasteful spenders.

Paying on time is an essential part of a healthy financial lifestyle. It helps you avoid late fees and problems with creditors, and it keeps your credit score high. Failing to pay even one bill on time can lower an excellent credit score by as much as 100 points. This can hurt your ability to secure new loans or lines of credit, and it could raise the interest rates you'll pay when you do borrow money. So it's a good thing that so many Americans pay their bills on time.

2. Most Americans with credit card debt pay more than the minimum each month

Our study on the psychological cost of debt showed that 58% of Americans with credit card debt make more than the minimum payment each month, indicating a high motivation to pay down debt and improve their financial habits. An additional 35% were able to make at least the minimum payment to avoid incurring late fees and collection calls. 

Paying more than the minimum is key to paying off credit card debt, but you need to have a clear plan for how you're going to become debt-free. Create a budget for yourself and decide how much money you can put toward debt repayment each month. Then, decide how you're going to approach it. If you have debt on multiple cards, one of the most common methods is to pay the minimum payment on each of your cards and then throw any extra money you have on the card with the highest APR. Once this is paid off, move on to the card with the next-highest APR and so on until all your cards are paid off. You could also try transferring a balance to a card with a 0% introductory APR or taking out a personal loan with a lower interest rate to cover the balance instead.

3. Millennials have less credit card debt than previous generations

Millennials receive a lot of criticism for their perceived laziness and lack of financial independence, but when it comes to credit card debt, they're actually outperforming their parents and grandparents. The Ascent's study on credit card habits by generation revealed that only 56.7% of millennials carried credit card debt, compared to 67.6% of Gen Xers and 65.6% of baby boomers.

The average millennial's credit card debt was also lower than the average Gen Xer's or baby boomer's. Millennials with credit card debt have an average balance of $5,453. By contrast, Gen Xers had an average balance of $6,627, while the average baby boomer was struggling with an average $6,800 in credit card debt.

4. Most Americans aren't overly reliant on credit

Using too much credit indicates someone living beyond their means, which is why your credit utilization ratio -- the amount of credit you use compared to the amount available to you -- is such an important part of your credit score. Typically, you don't want your credit utilization ratio to exceed 30%, and the lower you can keep it, the better.

Most Americans do a pretty good job at this, according to The Ascent's study on the average age people received their first credit cards and their subsequent credit behavior. The study broke down the average credit utilization ratio by the age that people first received their credit cards. 

It found that those who received their first credit card at 18 or under had an average credit utilization ratio of 33%, and it was even lower for those who got credit cards later in life. Those surveyed who got a credit card at between 18 and 20 had an average credit utilization ratio of 24%, while for those whose first credit card came when they were 25 or older, it was 20%. 

5. Most middle-class Americans aren't living paycheck to paycheck

Our survey on how Americans define the middle class revealed that about 44.5% of middle-class baby boomers, 40.5% of middle-class Gen Xers, and 39.8% of middle-class millennials are living paycheck to paycheck. While that's undeniably worrisome, it also means that the majority of middle class Americans aren't living paycheck to paycheck and are able to set aside money for their future financial goals or on things they enjoy.

Getting out of the paycheck to paycheck loop is not always easy, but there are a few ways to tackle it. You could look for areas to slash spending, like reducing your discretionary purchases and canceling subscriptions you don't use. Or you could try to increase your income by working overtime or starting a side hustle. For those struggling with debt, paying this off should help free up cash you can put toward other things.

We can't discount all of the concerning statistics that come up in many financial surveys, but hopefully these statistics help you see that it's not all bad. And if Americans are dedicated to improving their financial habits and willing to ask for help when they need it, we may see even more good news in the future.

These savings accounts are FDIC insured and could earn you up to 17x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 17x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2022.

Two top online savings account picks

Rates as of Sept. 30, 2022 Ratings Methodology
CIT Savings Connect American Express® High Yield Savings
Member, FDIC Member, FDIC
Rating image, 4.50 out of 5 stars.
4.50 stars
Info Icon Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.00 out of 5 stars.
4.00 stars
Info Icon Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Open Account

On CIT's Secure Website.

Open Account

On American Express' Secure Website.

APY: 2.70%

APY: 2.00%

Best For:

Best For:

Min. to earn APY: $100

Min. to earn APY: $1

About the Author