91 Million Americans Fear Maxing Out their Credit Cards on Large Purchases

The holiday shopping season is over now, and many Americans are seeing the impact on their credit card bills and bank statements. During the holidays, people often make a lot of large purchases, and sometimes max out their cards in order to do so. In a nationally representative survey conducted by WalletHub, 36 percent of respondents say they worry about maxing out their card with a large purchase.

That’s certainly a legitimate concern, considering Americans’ tendency to rack up credit card debt. After all, we started 2019 with over $1 trillion in total credit card debt. And while people with high incomes and stable employment may have no trouble putting large purchases on a credit card, reaping rewards, and paying them off quickly, it’s a different story for Americans with less stable incomes. When it comes to non-essential large purchases, they may be better off saving up and paying in cash. “If they don’t pay bills monthly and carry a balance with a high interest rate, relying on cash is a good discipline,” says David Laibson, a professor of economics at Harvard University.

Below are some more of highlights of WalletHub’s survey, along with additional insight from a panel of experts.

Key Stats

• Men max out more. Women are about 10 percent less likely than men to have maxed out a card at least once.
• Age shapes our definition of “large.” Millennials are twice as likely as Baby Boomers to choose “over $100” as the benchmark for a large purchase.
• Politics come into play when paying. Republicans are 3 times more likely to use cash than Democrats. Despite this, Democrats are also less likely to have maxed out a credit card for a large purchase.

Ask the Experts

Different people have different preferences on how to pay for large purchases. But how much of an impact do these preferences actually have on consumers, and are some payment methods objectively better? To gain further insight, we posed the following questions to a panel of experts. Click on the experts’ profiles to read their bios and responses.

1. Why do so many people fear maxing out their credit cards when making large purchases, and what advice do you have for shoppers with such concerns?
2. Do you think there is a correlation between gender and maxing out credit cards?
3. Is it natural for people's definition of a "large" purchase to change over time?
4. Why do you think Democrats are less likely to have maxed out a credit card for a large purchase than Republicans, despite Republicans being 3 times more likely to use cash than Democrats?

Survey Methodology

WalletHub conducted this nationally representative survey with over 700 respondents from 1/6/20 to 1/10/20. We weighted the statistical results to correct for demographic discrepancies. The margin of error for the total respondents is plus or minus 4.00 percent at a confidence level of 95%.

Full Details Overall

Note: Percentages may not total 100% due to rounding.