skip to main content

Upper-Income Consumers Most Inclined to Trim Their Debt


Upper-Income Consumers Most Inclined to Trim Their Debt

Sixty percent of this group intends to do so, compared to 44% of Americans overall

by Dennis Jacobe

PRINCETON, NJ -- In a new Gallup Poll, 44% of all Americans say they intend to reduce their overall debt over the next six months, with 60% of upper-income consumers planning to do so, compared to 50% of those having middle incomes and 38% with lower incomes.


One-Third of Americans Say They Have Decreased Their Debt

Thirty-five percent of Americans say they have decreased their total outstanding debt over the past six months -- up from 31% in May, 32% in April, and 34% in March.


Americans with the highest incomes are most likely to say they have reduced their debt, perhaps because they have the most debt to begin with or because they have the financial flexibility to make the decision to reduce debt. Fifty-four percent of upper-income consumers now say they have reduced their overall debt over the past six months, compared to 38% of middle-income Americans and 24% of those with lower incomes.


Many Americans Continue to Say Now Is a Bad Time to Borrow

There has been little change since March in Americans' views of how good a time it is to borrow money. In the new poll, 17% of Americans say now is a "good time" and 46% say now is a "bad time" to borrow.



On Wednesday, the Federal Reserve will report consumer credit growth for May. The consensus forecast is for a drop of $7.5 billion following March's decline of $16.6 billion -- the largest on record -- and April's decline of $15.7 billion. Gallup's consumer-credit-use polling suggests that consumers continued to retrench in May and June as they sought to deleverage their personal balance sheets and to shed debt.

More importantly, consumers -- particularly those with higher incomes -- continue to tell Gallup that they intend to further reduce their debt over the last half of 2009. This is consistent with Gallup's findings that consumers are closely watching their family expenditures and spending less in the "new normal." Part of the current pullback in consumer borrowing and spending may be the result of the continuing consumer credit crunch, which has been characterized by a lack of lending and loan availability, but part appears to be the result of a change in consumer attitudes toward spending and saving.

Americans' intentions to reduce their credit use in the months ahead may be the best thing for individual consumers as they work to improve their personal financial well-being, but it does not bode well for the nation's retailers and small businesses. Barring a major shift in consumer attitudes -- particularly among upper-income Americans, who have higher levels of disposable income and continued credit access -- back-to-school sales are likely to be anemic at best.

Survey Methods

Gallup Poll Daily interviewing includes no fewer than 1,000 U.S. adults nationwide each day during 2008 and 2009. Gallup Personal Credit Index results for this year are based on questions asked of 1,000 or more adults conducted March 23, April 27, May 29, and June 29, 2009. For results based on these samples, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.

For results prior to 2008, telephone interviews were conducted with 1,000 or more adults, aged 18 and older. For the total sample in these surveys, the maximum margin of sampling error is ±3 percentage points.

Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).

In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Polls conducted entirely in one day, such as this one, are subject to additional error or bias not found in polls conducted over several days.


Subscribe to receive weekly Gallup News alerts.
Never miss our latest insights.

Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A
+1 202.715.3030