An annual survey from Discover Personal Loans
also finds six in 10 Americans took steps to cover an unexpected
expense amid the pandemic.
A new survey from Discover Personal Loans revealed 58% of
Americans took steps to address an unexpected expense since the
beginning of the COVID-19 pandemic. Whether they felt prepared to
handle these expenses varied. Regarding medical expenses
specifically, more than four in 10 say they don’t feel prepared to
handle these surprise costs.
For those with existing medical expenses, 53% say the pandemic
caused them to take on new medical debt, adding to the stress many
are already feeling. In fact, Discover’s survey found Americans
with medical debt are more anxious about the cost of their medical
services than their health; 63% of Americans report that they are
anxious about paying for medical debt, compared to 47% who worry
about getting better.
“People should be more focused on getting and staying well,
rather than feeling held back by medical bills,” said Matt Lattman,
vice president of personal loans at Discover said. “If there are
gaps between what you owe, what insurance will cover and what’s
left in savings, turning to a personal loan might allow someone to
pay off medical debt or other expenses in one lump sum, with a
lower interest rate than other financial vehicles, and without
hidden fees.”
Medical debt forcing difficult choices
In addition to anxiety, medical debt has led to other
challenging and potentially harmful choices. Eight in 10 of those
with existing medical debt say they have postponed medical care
because of the cost, and medical debt has also caused Americans to
forego financial commitments:
Care put off by Americans with medical
debt, because of cost:
Financial commitments delayed due to
medical debt
Routine checkups
44%
Stop paying other bills
37%
Purchasing medication
39%
Skip vacations
37%
Preventative testing
38%
Stop spending on dining and
entertainment
35%
Being seen for a sickness
33%
Skip saving for retirement
32%
Surgery
27%
Skip adding to my emergency savings
28%
X-rays or scans
26%
Pay the minimum payment, and no more, for
my credit cards
23%
A treatment plan recommended by
my doctor
24%
Stop saving for my child’s college
20%
Seeing a specialist
24%
According to Discover’s survey, nearly 3 in 4 Americans with
medical debt have more than $2,000 in outstanding payments. And to
make these payments, more people with medical debt report using
their credit card, 41%, to pay for their care, over their medical
insurance, 38%. Others also cited leveraging payment plans from
their hospital, 27%, and personal loans, 22%.
Regardless of current medical debt, 58% of Americans
addressed an unexpected expense because of the pandemic
Americans most frequently needed to cover unexpected expenses
such as auto and home repairs, and emergency expenses. To pay for
these unexpected bills, consumers say they resorted to tapping
their emergency savings, borrowing money from loved ones and paying
their bills later than usual.
What type of unexpected expenses did
you need to cover? (Select all that apply)
Since the start of the pandemic, which,
if any, of the following have you done to cover an unexpected
expense?
Loss of income
60%
Tapped into my emergency savings
29%
Auto repairs
37%
Borrowed money from friends of family
19%
Home repairs
35%
Paid some bills later than usual
16%
Emergency medical expenses
32%
Put large expenses on my credit card
13%
Beyond helping with unexpected expenses, personal loans can help
improve consumers’ financial situation. For example, medical debt
can be consolidated with other debt, potential saving hundreds, if
not thousands, dollars in interest while also simplifying debt to
one set regular monthly payment. According to a 2021 Discover
Personal Loans survey, 85% of surveyed customers told us taking out
a Discover personal loan for debt consolidation helped improve
their financial future. 1
“For many, unplanned costs during the past year created
roadblocks in financial journeys, especially for people who were
already feeling the strain from other areas of debt and expenses,”
Lattman said. “If people do find themselves in one of these
situations, the important thing to know is that there are options
available, like personal loans, to help bridge gaps in savings
while simplifying multiple payments with a fixed payment
amount.”
About the Survey
A national survey of 1,515 U.S. residents ages 18 and up was
commissioned by Discover and conducted by Dynata (formerly Research
Now/SSI), an independent survey research firm, between September 23
and September 27, 2021. The maximum margin of sampling error was
+/-3 percentage points with a 95 percent level of confidence.
Generations are defined as: Generation Z, born after 1997;
millennials, born between 1981 and 1996; Generation X, born between
1965 and 1980; and Baby Boomers+, born before 1964.
About Discover
Discover Financial Services (NYSE: DFS) is a digital banking and
payment services company with one of the most recognized brands in
U.S. financial services. Since its inception in 1986, the company
has become one of the largest card issuers in the United States.
The company issues the Discover card, America's cash rewards
pioneer, and offers private student loans, personal loans, home
loans, checking and savings accounts and certificates of deposit
through its banking business. It operates the Discover Global
Network comprised of Discover Network, with millions of merchant
and cash access locations; PULSE, one of the nation's leading
ATM/debit networks; and Diners Club International, a global
payments network with acceptance around the world. For more
information, visit www.discover.com/company.
1Figure from an online customer survey conducted September 13 to
September 27, 2021. A total of 619 Discover personal loan debt
consolidation customers were interviewed about their most recent
Discover personal loan. All results @ a 95% confidence level.
Respondents opened their personal loan between January and July
2021 for the purpose of consolidating debt. Agree includes
respondents who ‘Somewhat Agree’ and ‘Strongly Agree’.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211208005205/en/
Robert Weiss robertweiss@discover.com 224-405-6304
@Discover_News
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